Password question

[partygirluk]

When I sign into my online banking, they ask me for my password. They then ask me for my "memorable information" which is just a second password. However, instead of asking me to type in my information, they ask me for three characters of it

e.g. Type in characters 3,6 and 7 of your memorable information.

Why would they do this?

[fnord_too]

Only thing I can think of is that this is some protection against key loggers, packet sniffers, and sholder surfers, since you won't be answering the same way every time.