Banks and financial technology firms have long been challenged with security threats. There have been countless cases where the accounts of consumers are scammed and used by unauthorized people. This challenge was intensified when the COVID-19 pandemic hit and in-person processes became limited, with almost every industry moving to the digital space. Still, going digital has been a drawback to the financial institutions that are still using password-reliant authentication systems.
Passwords have been utilized for years by several industries. However, they are known to be ineffective and more vulnerable to scams. This customer identity verification protocol is notorious for creating security risks online. Once hackers have obtained someone else’s login credentials, they can easily steal information, funds and even use the account to fund illegal activities. Aside from this, using the same password for different accounts is not advisable, making this outdated identity verification arduous to track and manage.
But because of the continuous growth and evolution of the digital industry, developments like multi-factor authentication or MFA have been made possible. MFA is a verification method wherein the user must provide two or more verification factors to access an account. Passwords combined with emails and SMS texts are two of the most common MFA techniques utilized by many. Nevertheless, these authentication factors are still susceptible to scams such as SIM swapping and hacking.
Progressively, the constant development in the digital world has helped in improving and strengthening MFA. Technological innovations such as iOS and Android’s built-in systems for supporting biometric identification are now possible. Through FIDO2, a more reliable authentication protocol, customers can have a seamless and secure digital banking experience. FIDO2 allows a user to carry out a passwordless login while assuring a more robust combination of verification factors such as biometrics and cryptographic keys.
To know more about passwordless login and the benefits of multi-factor authentication, here is a detailed infographic.
Infographic Source: https://authid.ai/blog/digital-banking-goes-passwordless