In the News: Customer Account Security

Online brokerages E-Trade Financial and TD Ameritrade both recently reported cybercrime incidents, leading to $18 million and $4 million in fraud losses, respectively. In light of these attacks we asked E-Trade CIO Gregory Framke to address how his firm handles customer account security. For more on the attacks, see "Cybercrooks Get Smarter."

How is E-Trade Financial ensuring the security of customer data and helping customers protect their identities and accounts?

Security risks are very real for financial institutions, whether they serve customers at a retail branch or over the Internet. The dynamic nature of criminal activity dispels the idea that fraud is here today and gone tomorrow. Instead, the industry consistently is challenged with improving security measures to combat fraud, no matter how or where it originates.

Fortunately, technology continues to rapidly advance, providing solutions that improve the security of enterprise systems. The greatest risk to consumers, however, lies within their personal computers. A recent National Cyber Security Alliance study shows that up to 80 percent of home computers are lacking core protections. In today's transaction-driven economy, online security must be a partnership between businesses and their customers. Partnering will help customers protect their identities and provide a strong defense against electronic scams and fraudulent activity.

Our primary goal is to help customers protect themselves from identity theft with tangible security solutions. E-Trade Financial was the first financial services organization in the U.S. to make the digital security token, SecurID -- a tool that makes online identity theft virtually impossible -- available to retail customers. In addition, we employ a wide variety of solutions designed to detect and deter key logging, phishing and other malware used to commit identity theft. We place customer information on a secure portion of our Web site and limit the account detail and personal information that appears in formal customer communications. In an effort to partner with our customers, we also provide timely and relevant security tips on our Web site to help customers take steps to prevent fraud.

Finally, and most importantly, we understand that technology solutions and consumers alike are fallible. E-Trade Financial believes its customers should be able to fundamentally trust that their assets are protected from fraud. So earlier this year, E-Trade Financial led the industry with the introduction of the E-Trade Complete Protection Guarantee -- pledging to cover fraud losses that result from unauthorized access to a customer account. --Gregory Framke