Magazine article American Banker

Netscape Security Breach Causes Jitters

Magazine article American Banker

Netscape Security Breach Causes Jitters

Article excerpt

The widely publicized breach of Netscape Communications Corp.'s encryption system has increased some bankers' concerns about providing financial services over the Internet.

But few expect that the incident will cause bankers to significantly curtail their involvement in on-line banking.

The trouble began when a pair of students at the University of California in Berkeley discovered a flaw in the secure communications software developed by Netscape.

The incident - while isolated and not extremely damaging, since no banks are running financial transactions over the Internet - has renewed concerns about the safety of exposing sensitive banking information to the vast and uncharted realm of cyberspace.

Several banks and financial service companies plan to create Internet based systems that incorporate Netscape's technology.

Miles Ewing, an analyst with the now defunct Office of Technology Assessment in Washington, which advised Congress on technological issues, saw the incident as a minor one.

The compromise, he said, involved accessing passwords rather than breaking the code that is central to the software's composition.

Once Netscape and other technology start-ups stabilize and "get a better track record," Mr. Ewing said, the banks would feel more comfortable.

Though bankers, by and large, may have felt similarly, some were taking no chances.

Wells Fargo & Co., ahead of the curve in its on-line offerings, took down the on-line banking segment of its site on the Internet's World Wide Web last week, after word of the Netscape flaw came to the bank's attention.

The bank has been using Netscape's Navigator software to allow its customers to check their account balances. This is the first step in Wells' broader electronic banking strategy.

Margaret Avakian, vice president and manager for Wells' on-line financial services, said the bank will look carefully at other security precautions, though it has no plans to drop Netscape as a partner or to halt its work on-line. …

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