Earmarking verification and multifactor authentication as the single biggest issue facing banks in 2006, Dewar said more controls should be implemented to authenticate the identity of customers conducting transactions on the Internet.

"Authenticating the identity of the parties involved in a transaction is the only workable solution to prevent identity theft," Dewar said.

"One reason phishing attacks are successful is that unsuspecting customers cannot determine they are being directed to spoofed Web sites during the collection stage of an attack ... the spoof sites are so well constructed that casual users cannot tell they are not legitimate.

"In 2006, financial institutions will need to investigate techniques to differentiate their legitimate sites from spoof sites by verifying their Web site back to the customer."

On the verification side, Unisys believes many industries will adopt smartcard technologies, rather than single-factor authentication, as a way to combat fraud.