Internet Banking Security

Over the years my bank's Internet banking security has gradually got more and more secure.

First I had to enter a four digit numerical code, different to the one used to get money from an ATM, and reply to one of four questions to which only I knew the answers (inconveniently one of the answers I specified is 19 characters long and seems to be the one that comes up most often. Does their security software have a built-in algorithm for the longest possible answer?). Then last year they introduced a new system whereby it asked you randomly for just two digits of the numerical code in addition to the security question.

They are now introducing a new security measure - giving a Visa Debit/Credit card reader to every customer to attach to the customer's computer (I assume by USB?) to verify his/her identity when conducting fund transfers or establishing new standing orders.

According to their website it will work with Windows and Mac OS but fails completely to mention Linux.

At least it is meant to work with Firefox. Though the instructions for setting up your browser seem to be rather complex for your average user.

But what is behind this?

It cannot be cheap to distribute for free a card reader to every cardholder using their Internet banking services. Everytime I log on to their Internet banking service I get a lengthy warning about phishing attempts. Are other banks implementing these card readers? Is Visa (but not Mastercard or American Express) the only card company implementing this?

Is the government trying to trace our money transfers?

I cannot transfer outside of the UK via the Internet. The website will not accept a Swift or NIB code. What is this all about? Do other banks accept Swift/NIB codes on their Internet banking sites?