19 November 2004 Passwords offer inadequate protection for corporate networks and should be phased out in favour of smart card and biometric technology, according to Microsoft chairman Bill Gates.

Speaking at the annual Microsoft IT Forum in Copenhagen, Gates said Microsoft will simplify existing identity systems and improve authentication technology to prevent fraudulent attacks, such as phishing.

“A major issue for identity systems is the weakness of the password,” said Gates. “Unfortunately, for the type of critical information on these systems and the regulations that ask that these systems be secure, we are not going to be able to simply rely on passwords,” he added.

UK bank NatWest has this week suspended some of its online banking facilities because its customers were being targeted by phishers. NatWest has suspended the creation of standing orders and new third-party payments, ensuring its customers are not defrauded after an onslaught of sophisticated spoof emails.

The British Computer Society has also warned this week that UK businesses are easy prey for malicious hackers. In the BCS Review 2005, it warns organisations must start taking IT security more seriously if UK businesses are not to fall victim to cyber crime. It advocates increased use of encryption technology to protect corporate data.