On Feb 19, 2009, at 8:36 AM, Peter Gutmann wrote:

There are a variety of password cost-estimation surveys floating around that put the cost of password resets at $100-200 per user per year, depending on
which survey you use (Gartner says so, it must be true).

You can get OTP tokens as little as $5.  Barely anyone uses them.

Can anyone explain why, if the cost of password resets is so high, banks and the like don't want to spend $5 (plus one-off background infrastructure costs
and whatnot) on a token like this?

(My guess is that the password-reset cost estimates are coming from the same place as software and music piracy figures, but I'd still be interested in any
information anyone can provide).
I suspect some very biased analysis. For example, people who really need their passwords reset regularly will probably lose their tokens just as regularly. The cost of replacing one of those is high - not for the token itself, but for the administrative costs, which *must* be higher than for a password reset since they include all the work in a password reset (properly authenticating user/identifying account probably contribute the largest costs), plus all the costs of physically obtaining, registering, and distributing a replacement token - plus any implied costs due to the delays needed to physically deliver the token versus the potential for an instantaneous reset.

I suppose the $100-$200 estimate might make sense for an organization that actually does password resets in a secure, carefully managed fashion. Frankly ... I, personally, have never seen such an organization. Password resets these days are mainly automated, with authentication and identification based on very weak secondary security questions. Even organizations you'd expect to be secure "authenticate" password reset requests based entirely on public information (e.g., if you know the name and badge number of an employee and the right help desk to call, you can get the password reset). New passwords are typically delivered by unsecured email. All too many organizations reset to a fixed, known value.

It's quite true that organizations have found the costs of password resets to be too high. What they've generally done is saved money on the reset process itself, pushing the cost out into whatever budgets will get hit as by the resulting security breaches.
                                                        -- Jerry


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