Every day we see businesses breaking geographical friction and digitizing various processes. When offering virtual services, a strong user authentication process become important. It’s not just a competitive advantage that it provides, but also a robust system that is capable of mitigating and effectively managing an enterprise's exposure to risk and fraudulent activities.
As organizations have become more adept at detecting transactional fraud and traditional identity theft, the creation and use of synthetic identities to commit fraud has reached significant proportions. Is the person behind that digital transaction who they purport to be? Does that person, in fact, exist at all? Companies have mere seconds to differentiate a legitimate customer from a fraudster, a feat that requires them to access data from a growing number of disparate internal and external sources.
In addition to detecting fraud, enterprises are under pressure to do so while simultaneously allowing good customers and applicants to transact with minimal friction. This is where strong authentication comes into play.
What’s in it for businesses?
Building a customer-centric business requires ample trust and security. Apart from meeting these critical aspects, user authentication also provides significant advantages that include:
1.Saving business costs and time
For businesses that rely on a manual onboarding process or verifying the identity of a user remotely, digitizing the user authentication and onboarding process can create significant cost synergies and save time by limiting the need for staffing and infrastructure.
2. Enhanced user experience
A digital user authentication solution enables businesses to provide their customers a seamless experience instead of meeting long queues or being physically present at the office. Ideally, this would translate to better conversion rates - resulting in higher sales, customer retention and revenue.
How does authentication work?
It’s a simple process where a user is usually identified with a user ID, and authentication is completed when the user provides an official document to support the information or a credential to gain access to their account - for example, a password tagged to their user ID. This credential that is unique to the user is called an authentication factor.
For example, users would be authenticated through a workflow that’s executed locally using identity details and passwords. When the user enters their login credentials and the credentials match, the authentication is then complete and the user is granted access to their account.
Different methods of authentication
Most user authentication methods fall into one the following categories:
1. Knowledge-based authentication
Knowledge-based authentication is one of the forms of authentication that seeks to verify a user’s identity by requiring the user to respond to security questions that are specifically designed for them. Another security layer to this process is ensuring that the responses are provided within a time limit.
One of the biggest benefits of utilizing knowledge-based authentication is its customer-centric approach - making it easier for the user to understand and respond quickly. However, a rising challenge in using knowledge-based authentication is that it’s getting easier for threat actors to comb through personal data available across social media channels and narrow down possible responses to the security questions.
“Obviously, be as careful as is humanly possible with social security numbers (SSNs) and passwords, and try to select security questions that involve answers that aren’t easily discoverable on the web,” says Jesse Damiani of Forbes.
2. Two-factor authentication
One of the more popular forms of authentication is 2FA (two-factor authentication). This process generally requests users to provide an accepted form of personal identification that is used to verify the details given at the time of login.
More often than not, this is usually in the form of a token or a security key that users will have with them. Since traditional forms of authentication such as passwords can be easily lost or forgotten, tokens are an easier (and secure) option when accessing accounts.
When it comes to managing fraud, a token can act as an additional layer of security - creating a strong deterrence for threat actors. However, one of the challenges that 2FA has faced is that many users don’t seem to like the process.
In a New York Times report, it was found that Google, despite being one of the world’s largest online platforms, had seen less that 10% of its user base sign up for two-factor authentication. This was largely attributed to the process being cumbersome and time-consuming for the user.
Several studies have found that when two-factor authentication is optional, most people do not want to use it. In a time of digital transformation, where customer and user experience is critical for a business to function, these challenges highlight that it’s time to rethink our approach to the various forms of authentications used.
3. Biometric authentication
Biometric authentication measures and verifies the biometric features that are unique to a user to provide access to an account. Since biometrics - including fingerprints, iris and retina, facial characteristics - are unique to each customer, it adds an enhanced layer of security to the overall authentication process and makes it significantly safer than traditional methods of authentication.
An optimal identity verification solution will combine strong security and data privacy into its process, without compromising on the user experience. At Passbase we use liveness detection to scan the user’s biometric details and back it with over 6,000 government issued forms of identification from 190+ countries to verify and authenticate the true identity of an individual.
Interested in learning more about what Passbase can do for you? Schedule a free demo with us today.