How have customers responded to your two-factor authentication service? There's been nothing unexpected, certainly not on the con side. In fact, one nice ancillary benefit is that customers who have adopted SecureID feel more secure.

What was the main driver of the initiative? In the [past], companies focused a lot of their time and energy [on] protecting themselves from people who wanted to hack into the company or launch denial-of-service attacks. While these things certainly haven't gone away, ETrade got the sense early on that there was a trend that [hackers] were starting to go after the weakest link in the chain, which was the customer. We've been employing a number of techniques to help protect our customers. Multifactor authentication is kind of like the padlock on the door.

Is multifactor authentication available to all of your customers? It's available to anybody who wants it. We did a pilot with a restricted number of customers, and the feedback was very positive. It is now available to all our customers. If you are an active trader or have more than US$50,000 in assets with us, you can have it for free. Otherwise, you pay a one-time fee of $25.

How do you respond to concerns that token-based authentication is expensive to implement and can be inconvenient for users? I am well aware of those limitations, but we felt that it was too important to give our customers [nothing]. I did it knowing full well that I may end up replacing it with something that is not a hardware token. Our customers really like them, and I'm here for my customers.

Companies need to walk the line between providing real security and providing convenience. Customers are kind of schizophrenic. They want security, but they don't want to be inconvenienced too much.