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How can a software token be as secure as a hardware token?

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This FAQ applies to: WiKID Strong Authentication Server Enterprise Edition, WiKID Strong Authentication Server Community Edition, All Software Tokens

Simple, really.

There are two factors: possession of the private key and knowledge of the PIN. The private key is stored on the client. Our PC client, for example, this key is in a password-protected PKS12 encrypted file. If someone steals this file and brute-force attacks it and gets the passcode, they are only half-way there.

They still need the PIN. The PIN is stored encrypted on the WiKID server. Losing the private key is the equivalent of losing a hardware token. You're only half-way there.

Typical software tokens store the PIN, the secret and the algorythm all in the client. Clearly this is not the way to do it.