The research on predicting social security numbers published today by Alessandro Acquisti and Ralph Gross from Carnegie Mellon University unfortunately highlights a fairly classic case of something we do all too often: basing security on something that was never secure-- and never really intended to be secure-- in the first place.
Much of the information that we readily pretend is a valid authentication key (such as Mother's Maiden Name, Date of Birth and Post Code-- and indeed Social Security Number) has really always been publicly available information. The parameter that has changed is how financially viable it is for a criminal to access the public records necessary to deduce this "secret" information. The SSN allocation scheme is perfectly well documented, public information, and the scheme clearly has no element of security built into it whatsoever. The historical origins of the scheme are also documented: the scheme has no security now, never did and was never intended to.
So what do we need to do about this? We need to understand where security actually lies, and not pretend that it exists in places where it doesn't. In most cases, the "security" does not currently lie in whether somebody can guess your PIN number, forge your signature, find out your mother's maiden name or guess the last couple of digits of your SSN. Our measures for preventing discovery of these largely unsecret "secrets" are predictably diabolical, and they are thus extremely weak forms of authentication. A transaction that is "authenticated" by an SSN or signature is essentially unauthenticated and the security of that transaction relies on it being quickly reversed in the event of fraud. So long as users, banks and lawmakers all understand this, the situation isn't so dire. The big danger comes when we pretend that there is security and authentication where there really isn't.