Usage of Two-Factor Authentication in Banks

Two factor authentication is important nowadays due to the rapid increase in online phishing scams. Hackers are able to guess user's passwords and get into their personal banking accounts to commit fraud. In order to prevent such things from happening, the industry has used "Two-Factor Authentication" .

Which basically means, you can use 2 out of the 3 possible ways to identify yourself;
1. Something you know
- Passwords
- Passphrases
-PIN codes

2. Something you have
- A security token
- A security card
- Anything that generates authentication codes for use with the "lock" something like a key

3. Something you are
- Biometric
- DNA
- Iris/Thumbprint scan

When using 2 of the authetication ways to authenticate, it becomes much safer as compare to the traditional password (Some one can guess it) or security token (Somebody can steal it) or thumbprint scan (err if someone cut off your thumb?)

The user would now need to produce 2 ways for the system to authenticate them.