RSA Acquires Financial Services Startup

RSA Security has snapped up PassMark, a software-based authentication startup that focuses on the financial services industry.

The deal, valued at some $45 million, fits into RSA's strategic focus on authentication and security solutions used in online banking processes.

Based in Menlo Park, Calif., PassMark markets a two-factor authentication solution that authenticates each user to a Web site using passwords as well as images, which adds an extra layer of protection against online fraud. The acquisition also allows RSA to leverage PassMark's voice-based biometric authentication system, which uses biometric “voiceprints” to authenticate users over wireless and landline phones.

Greg Hanchin, a principal at DirSec, a Denver-based security integrator, said federal government requirements for enhanced authentication services for online banking are driving RSA to acquire startups specializing in these areas.

"RSA wants to get stronger in the financial world with single sign-on, identity management and other online banking technologies," Hanchin said.

"RSA Security has clearly differentiated itself in the authentication market with a broad-based, adaptive approach," said Art Coviello, president and CEO of RSA Security, in a statement. "Now we are gaining from the addition of more than 20 leading financial institutions to our consumer online banking portfolio--and the deep market knowledge and experience of this group."

PassMark Chairman Bill Harris will join RSA's board. In addition to serving on the boards of EarthLink and Macromedia, Harris also has been CEO of PayPal and Intuit.