online banking

[rabet]

I have one of those little gizmos from HSBC that generates a new log-in code number each time you go online. How does the bank's computer know and recognize these numbers?

[MarkRae]

By reversing the algorithm used to generate them in the first place.

[Hymie]

Although Mark’s answer is technically correct, it is a little short on substance.

My Barclays card reader (which works on the same principle) generates an 8 digit number, therefore there are a total of 100 million possible permutations.

The reader requires input of the correct card pin number for the bank card – once this has been done, the reader algorithm (mathematical calculation) generates one of probably 100,000 valid 8 digit numbers which will allow you to access your online account. Based on my guess of only 100,000 valid 8 digit numbers – you would have 1 in 1,000 chance of guessing a valid number.

Your online bank knows that you are accessing your account and so can use the same algorithm to determine that the 8 digit number entered is one of the valid numbers for your account and bank card.

I suspect that once a particular 8 digit number sequence has been used to access your account, that the account cannot be accessed using the same number again. This would stop someone who had placed a key logger or some other intercept on your PC from using it.