Barclays Bank has claimed zero fraud among its online customers thanks to the use of two-factor authentication technology.

The bank has equipped one million customers with the PINsentry card readers, which provide automatically generated one-time passcodes, to use in conjunction with the password that users already know.

Deployment of the devices began in July 2007 and the bank said that not one online customer using the Gemalto-provided system has suffered fraud since. Barclays also said that customer uptake of the devices was higher than expected and exceeds 30 per cent.

"Our goal was to provide our online customers with an easy-to-use, highly secure product to protect them against fraud," said Barclays’ digital banking director Sean Gilchrist.

"Adoption of the PINsentry reader by one million cardholders in one year is a clear demonstration that we made the right choice."

But the use of two-factor systems has received critics in the past few months after it emerged that the devices could be easily hacked. And the fact that a number of retail banks including Lloyds TSB, Royal Bank of Scotland and Nationwide are offering the different readers could signal impracticality.

“The fact that each issuer of cards will use a different authentication device means that a customer with three cards could end up with three different devices in their pockets,” EA Consulting Group director Robin Bearne told Computing earlier this year.

But banks such as HSBC and Abbey have decided to opt out of the scheme. The latter said its customers do not see the need for the devices.