Chilean Financial Institutions Serious About Protecting Customers Online

Entrust versatile authentication platform popular choice in South America

During the first quarter of 2007, the Chilean government issued a mandate — the first in the world to have a strong enforcement clause — that all financial institutions implement strong two-factor authentication to help secure electronic transfers.

This legislation required all banks to comply with three new rules to help protect online transactions. The first, which is already in place, mandated that the financial institutions implement two-factor authentication for all electronic transfers by January 2008. The two remaining rules have yet to be finalized and approved.

Today, several of the country's major banks are still not in compliance and are left with heavy fines and damage to their corporate brands. Ten of the top 16 banks in the country, however, opted for an easy-to-use, easy-to-integrate solution from a single security expert.

How did these organizations solve this security challenge, sometimes with truncated timelines? What solution did these 10 banks implement? The answer: the Entrust IdentityGuard versatile authentication platform for its ease of use, straightforward deployment and wide variety of authenticator choices.

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A product manager at one of the banks stated that ease of use, versatility and efficiency of this versatile authentication platform was a key differentiator in their decision. Because of the solution's flexibility, each bank was able to choose the authentication method that best fit their security needs and was right for their customer base — all within the same platform.

Banco Security, for example, leveraged the versatile authentication platform's grid card solution to help verify the identities of over 17,600 customers. Banco Security has nine offices in Santiago, Chile, four regional branches, but predominantly provides its services through electronic channels, which made the need for strong multifactor authentication a priority.

In 2006, Chilean-based Banco Santander was the first to deploy Entrust IdentityGuard, even before the Chilean government mandates were in place. The world's 12th-largest bank, Banco Santander increased their Entrust IdentityGuard grid authentication plans to include more than 680,000 customers. Part of the Santander Group, one of the largest financial groups in the world, Banco Santander originally considered expensive competitive third- party one-time-passcode (OTP) hardware tokens, but concluded that this option would have been far too expensive for their customers.

The mandate, outlined in the document titled "Chapter1-7, Electronic Transfers of Information and Funds," was enacted by the Superintendencia de Bancos e Instituciones Financieras Chile, which regulates banks and financial institutions in Chile. From an enforcement perspective, it is one of the strongest regulations in the world to help financial institutions better secure their customers.

A large number of financial institutions in a single country proved the value, cost-effectiveness and efficiency of implementing two-factor authentication. From complying with government mandates to protecting customer information to strengthening a brand, leveraging a proven versatile authentication platform is a sound strategy, particularly as part of a comprehensive layered security approach.

>> Want to know more? Visit Entrust for proven solutions for consumer authentication.