Tired of online fraud...apparently so are the banks..

To ward off cyber-crooks trying to break into customers’ accounts, banks are expanding their security efforts beyond desktops and onto iPhones and other mobile devices.

Take HSBC Bank USA, for instance, which last week announced it’s handing out free two-factor authentication tokens in the next few months for customers to use in their personal Internet banking. These digital and physical security tokens from Vasco Data Security can generate unique one-time passwords each time a customer logs in. And another financial institution, U.S. Bank, this week said it’s testing how voice biometrics in a mobile banking app for smartphones can let customers authenticate via their own voice for access to their payment-card accounts rather than having to type passwords.

“We take security very seriously,” says LuAnne Kingston, senior vice president at HSBC, which is especially encouraging use of two-factor tokens in sensitive transactions such as bill paying, wire transfer or changing account information. Cybercrime is a fact of life on the Internet, and “we’re trying to stay ahead of the game,” she adds. “The bad guys are constantly trying to access customer data.”

Gartner analyst Avivah Litan notes that other banks, such as Bank of America, have also tried mobile two-factor authentication, and that Schwab and E*Trade offer this on an opt-in basis. She says it’s unclear how many customers actually do opt in. But it’s particularly interesting that HSBC will utilize the consumer’s mobile phone for loading the one-time password software, Litan adds.

One-time passwords generated by tokens or other devices do not provide any absolute guarantee of security, because “sophisticated thieves using common banking Trojans” have shown one-time passwords can be “circumvented,” Litan says. However, one-time passwords  ”still add another layer of protection for the consumer” and their use “is likely to send the bad guys to other accounts that are not so well protected,” Litan points out.