Online banking security risks through European eID cards

A new paper by the European Network and Information Security Agency (ENISA) focuses on authentication risks with European eID Cards. It analyzes 7 vulnerabilities, identifies 15 threats and gives security recommendations.

Major European eID interoperability projects, such as STORK and its successor ELSA are aiming at a European-wide take-up of new technologies. In this context, ENISA takes an independent look at the security risks related to online banking authentication by comparing smart eID cards with other authentication means.

Online banking in one of the most widely-used electronic services by European consumers. It is a strategic service for financial institutions and users. With 24 hour service availability, it is extremely convenient. It is often without any extra costs; or even at reduced costs compared to traditional banking processes.

However, online banking fraud is on the rise. Thus, security is a major concern both for online banking, e.g. tax declarations. The report also includes a case study on privacy issues when authenticating with smart cards to online social networks.

The Agency report explains that because more and more internet applications require authentication, more standardized approaches to user identification and authentication are needed. In Europe, several states have already rolled out electronic ID cards. The first steps when we use internet services are usually to identify ourselves by our names and then authenticate that it is us.

The security levels for these steps can vary from a simple combination of username, password, through a secret PIN, to credentials generated by some external device or a smart card using cryptography. Smart cards are increasingly being used for authentication purposes. Many European identity cards contain a smart-card chip, with functionalities for online authentication.