The Federal Deposit Insurance Corporation (FDIC) today released the results of a study titled Putting an End to Account-Hijacking Identity Theft (PDF). Among the study's recommendations, the first was that financial institutions should upgrade existing password-based single-factor customer authentication systems to two-factor authentication.

Alenka Grealish of Celent Communicatins writes in Bank Systems & Technology on banking trends for 2005.

[Note: This offer has expired. This post is here as an historical archive.]

Citibank has begun offering free Apple iPod Mini's to new EZ Checking account customers.

Consumers must open the account online, fund it with $2,500 and pay 2 bills online each month for 12 consecutive calendar months -- a few of the key terms among the offer's fine print.

With American Express announcing its second US bank partner deal with Citibank yesterday, the implications for card-accepting merchants of any shift in spending away from Visa and MasterCard branded cards to Amex cards are coming into focus.

One industry analyst estimates that for every $100 in cardholder purchase activity that moves to Amex-branded cards, merchants will pay $0.50 in higher card acceptance fees due to the higher interchange/merchant discount fees that American Express charges.

Of course, it's the financial participation in that higher interchange fee income that's the primary (only?) motivator for MBNA and Citi to do these alliance deals with Amex. In combination, Citi and MBNA issue cards responsible for about 25 percent of credit card spending in the US.

2005 could also shape up to be a tough year for MasterCard in terms of potential impact to its US payment volume. Two of its largest issuers have announced Amex alliances. One (MBNA) is in the midst of an aggressive roll-out of Amex-branded cards. Another top issuer, JP Morgan Chase, is reportedly still considering its brand decision -- between Visa and MasterCard (or, perhaps, also Amex?).

Robin Sidel reports in the Wall St. Journal on MBNA's launch of marketing of Visa Signature cards. For more information, see MBNA's Visa Signature home page.

RSA Security has announced that Commerce Bank will be using RSA's SecurID token for two-factor authentication of more than 4,000 employees and corporate banking customers.