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How Hacker-Proof Are Your Banking Passwords?

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Easy-to-guess passwords still dominate.

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Despite all the reports of Internet security breaches, identity theft, and hacked bank accounts, people are still using easy-to-guess passwords for nearly all of their online activity.

That's the conclusion from two recent studies that looked at passwords in general and banking passwords in particular.

At the end of last year, a hacker was able to gain access to 32 million passwords held by software company RockYou. The list was briefly posted on the web and security researchers were able to take a detailed look at the most popular choices.

According to Imperva, a company that makes blocking software, the most popular password -- used by almost 1% of the entire sample -- was "123456." The second most popular? "12345." Others in the top 20 included "654321," "abc123," "iloveyou," and "password."

Perhaps more disturbing was the fact that about 20% of the samples picked from the same, relatively small pool of 5,000 passwords. This means that hackers could use automated programs to break into millions of accounts in a very small period of time, leaving security officers no time to react.

Although the security breach at RockYou was far from trivial -- they make software for Facebook and MySpace (NWS) among others -- it would have been much worse if a financial institution such as Citi (C) or Chase (JPM) were involved.

Here, you'd expect individuals to take far more care over their choice of password. Not so, says the results of another study, this time by security firm Trusteer. They found that 73% of individuals used their online banking passwords across multiple sites, making it easy for criminals to hack into less secure sites and then go after the banks.

This backs up an earlier survey from analyst firm Gartner (IT), which found that two-thirds of consumers use the same one or two passwords across all websites they visit.

Avivah Litan, who directed the Gartner study, suggests that the sheer number of websites requiring passwords is taking its toll. "[Consumers] are making a choice of convenience over security," she said. "They are using a cost-benefit equation …they don't want to try and remember 10 different passwords for everything they do."

Although banks have added other layers of security, like tagging computer equipment and monitoring user characteristics, they're not the only ones storing sensitive information these days. Even a hacked Facebook account can cause huge problems for the victim.

Security experts recognize the problems with choosing unique passwords for dozens of websites, ATMs, cell phones, and other gadgets but they still stress the importance of variety.

Amit Klein, chief technology officer of Trusteer, recommends maintaining at least three "families" of passwords: One for critical financial sites, a second for sites that store personal information, and a third for generic log-ins.

Most Popular Passwords from RockYou Data
(Source: Imperva)

1. 123456
2. 12345
3. 123456789
4. password
5. iloveyou
6. princess
7. rockyou
8. 1234567
9. 12345678
10. abc123
11. Nicole
12. Daniel
13. babygirl
14. monkey
15. Jessica
16. lovely
17. Michael
18. Ashley
19. 654321
20. qwerty

See also, Thirteen Ways to Avoid Identity Theft and Safeguard Your Secrets In the Age of Social Networks.

Visit TheOnlineMom.com for the latest tech-savvy tips.
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No positions in stocks mentioned.

© Monica Vila, The Online Mom.

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