The increase in online fraud and unauthorized access to consumers' bank accounts is prompting banks to follow the lead of credit card companies and keep closer watch over individual transactions.
Banks have historically considered deposit accounts less at risk than credit card accounts, and have been reluctant to invest in anti-fraud monitoring software. But that is changing now that criminals are collecting and trading deposit account information and using that information to drain accounts.
"It has just become inescapably clear that passwords alone will not continue to do the trick," said Bill Harris, the founder and chairman of PassMark Security Inc.
Card companies have long been able to spot unusual purchases. Now banks are using technology that can flag deposits and transfers that are inconsistent with a customer's habits.
The authentication software from PassMark, of Redwood City, Calif., adds another layer of protection to the log-on process. The next version of its online banking product will have a transaction-monitoring feature similar to systems used in the credit card business, Mr. Harris said.
Cyota Inc.'s eSphinx includes transaction monitoring. Amir Orad, the New York company's executive vice president of marketing, said the product can reduce unauthorized Internet access to deposit accounts by 80%.
"We've seen that same figure again and again, across all of our customers," Mr. Orad said.
Cyota operates a fraud-detection network that pools transaction information from 40 large banks and thousands of small ones. The network also gathers information from America Online Inc. and Earthlink Inc.
This helps Cyota identify potentially fraudulent activity, Mr. Orad said. For example, the system would send up a red flag if it noted that someone using a computer in the United States to initiate a transaction with a U.K. bank tried to access an account at a U.S. bank a few seconds later with the same computer, even if both transactions taken individually would not have raised suspicion.
Cyota's customers include five of the top banks in the United States and the U.K., Mr. Orad said.
David Sosna, the co-founder and chief executive of the New York security software vendor Actimize Inc., said there are certain tendencies in unauthorized account access. Typically criminals will transfer money from several accounts into a specific account at the same bank, and "as soon as the money hits the other account, the criminal will take the money and vanish," he said.
When there is "unusual activity hitting more than one account," it can be a sign of fraud, he said. Actimize is "trying to put a defense mechanism on the actual activity of liquidating funds from the account."
The PassMark, Cyota, and Actimize systems examine Internet Protocol addresses and log-on behavior, and they evaluate actual transactions. Actimize's 35 customers in the United States include 10 of the top 20 banks, Mr. Sosna said.
Avivah Litan, a vice president and research director at Gartner Inc. in Stamford, Conn., said transaction monitoring is a good way for banks to spot suspicious activity that may not be reflected in sign-on patterns.
Some banks already offer customers tools for added authentication - such as passcode-generating keychain tokens or the current version of PassMark's software - for the initial sign-on process.
But "stronger authentication isn't enough, because there's so many other ways into the bank account," Ms. Litan said. For example, some viruses can wait for customers to log on and then move money out of the account.
"The rubber meets the road when the money leaves the account," Ms. Litan said, so that is where fraud detection is most vital. She said that "banks are very interested" in this type of technology and that some "are looking for that kind of thing and they don't know that there are vendors doing it."
Mr. Orad at Cyota said stronger authentication is still important, because customers want it. "Banks have two different goals," he said. "One is to provide their customers with a sense of security, and the other is to provide them with real security."
