Apparently, Roger Dean, executive director of EEMA, recently declared two-factor authentication “not worth anything anymore.” According to the article, Dean's thinking is that man in the middle (MITM) attacks render strong authentication useless.
Isn't that like claiming that firewalls are worthless because they don't prevent viruses from being installed on desktops? Strong authentication (which includes two-factor) was never intended to prevent MITM attacks. That problem was already (theoretically) solved with SSL.
Perhaps Dean was reading Bruce Schneier's thoughts from back in 2005. I get it. Issuing tokens to users is not a panacea. But, there is no cure-all in the security space. We rely on SSL to establish secure links to sites, which should both identify the site as being who it says and prevent snooping. Theoretically, that end-to-end encryption and use of trusted certificate authorities is what would prevent MITM attacks.
But even when using SSL correctly (and assuming there are no flaws in SSL), there is still an authentication challenge that strong authentication techniques such as two-factor rise to meet. Without it, users may share credentials or use weak passwords exposing numerous other potential attack vectors.
I think Dean's frustration is focused in the wrong direction. Strong authentication techniques are good at what they do and (still) have their place in the security infrastructure. I think the problem he's seeing mainly lies in the user interface of SSL. Like any good security feature should, it does a good job of staying transparent to the end user. But a little too good. So good, in fact, that most users don't even know when it's not there. And that's the problem.
If we could force users to look for and expect the SSL connection and to confirm the domain with which they're connected, phishing and MITM would become immediately unprofitable. I'm surprised browser vendors haven't done that yet (and EV certificates are not the answer). Personally, I'd want to see a white list approach for personal banking and other regular-use sites coupled with a per-use hoop to jump through for occasional other data transfers.
But don't blame strong authentication for SSL's incompetence.