Today's American Banker reports that $365 million-asset Stonebridge Bank (West Chester, PA; $365 million) and American Bank (Allentown, PA; $500 million) are following E*Trade's move to offer hardware tokens to authenticate consumer logins.

As of May 30, Stonebridge is offering the token free-of-charge to any of its 4500 consumers who request one. The token will be mandatory for its 500 business customers. In its security FAQ, the bank says it will charge $25 annually, its out-of-pocket expense for the device, after the first year. They also charge $25 to disconnect the token during the first year and $25 to replace it within 5-7 business days, or $45 total for overnight delivery.

American Bank is sending the token to 1000 customers who said they would like one in a recent survey. There is no charge for the service. The bank expects to order another 1000 from RSA Security next month. It pays approximately $20 each, which does NOT include maintenance costs to operate the system.

Analysis
We applaud these three financial institutions for moving beyond the username/password. However, except for the most demanding customers, primarily businesses, hardware-based solutions are overkill.

The Bank of America/Passmark approach is much better. Not only is it more cost effective, it also much easier to use and also helps prevent the user from logging in at a fake site. 

—JB