Cyberattacks are amongst the top concerns of the financial industry, and they show no signs of slowing down. According to an Accenture report, security crimes have risen 31% between 2020 and 2021, despite all the innovative security tools companies and individuals can have in place. Data protection is crucial for any organisation, especially as the cost of cybercrime is expected to hit $10.5 trillion by 2025 (Cisco/Cybersecurity Ventures report).
Both 2FA and MFA help organizations protect their customer data by adding an extra layer of security when creating accounts, logging in, or making payments. In this article, we explore the advantages of 2FA and MFA and how they differ from each other.
What is 2FA?
2FA or 2 Factor Authentication is a process by which users need to add an extra piece of information before accessing their accounts. Aside from the usual username and password entering, 2FA requires users to add other personal data to verify their legitimacy. This adds extra protection to their data because even if criminals could find out the user’s username and password, they are unlikely to know or have the second factor required to authenticate themselves, so they wouldn’t be able to access the account. The second factor could be any of the following:
Something you know
This can be another password or, most often, a secret answer to a particular question related to your hometown, pets, childhood, parents, etc.
Something you have
This is something that users own, which could be a credit card, smartphone, or other pieces of hardware that they can use to verify their identity.
Something you are
This includes biometric patterns such as a fingerprint, voice print, or iris scan. Users are required to, for instance, take a selfie, so their face is scanned and matched to their account records.
Types of 2FA
There are various types of 2FA that websites have in place. Some are slightly more advanced than others, but any 2FA is more secure than the regular password and username combination. These are some of the most popular 2FA types that users may find on websites and apps:
Various companies use SMS-based 2FA to verify their customers’ identities. This type of authentication includes sending a unique one-time passcode or OTP via SMS to customers once they have correctly introduced their username and password. Customers often have a limited time to check the OTP and add it to their website. Once the time limit has passed, customers must request an OTP again. While this method is widely used, it is considered one of the least safe ways of authentication, so companies that manage personal information may opt for more advanced techniques.
Another common type of 2FA is push notifications. When users log in to a website, they get either an email or SMS message stating that somebody tried to access their account. Then, they can either confirm it was them or deny access if it wasn’t them. These notifications often contain the exact time when the tentative log-in happened and the IP Address of the person who tried to access the account. No password or tokens are required for this method, just a button click.
2FA Software Tokens
This 2FA method requires users to download an authentication app such as Google Authenticator, Microsoft Authenticator, or Lastpass. These are all free to install and contain time-limited codes, usually composed of a set of numbers. These codes, or soft-tokens, change every other minute. When logging in to a website and adding the username and password, the website will require users to add their unique code. Users must open their authenticator app, check the code and add it to the website. The apps enable users to connect to multiple websites, so having one app is enough.
Differences between 2FA and MFA
MFA, or multi-factor authentication, is a method that requires more than two authentication factors. These factors are taken from the list above: something users have, something they own, or something they are. The only difference between the two methods is that while 2FA requires only one extra factor from the list, MFA requires at least two.
Despite MFA seeming more complete and more secure, it is difficult to determine precisely which method adds more security. This is because it very much depends on the types of authentication chosen. For instance, as we have seen, SMS-based authentication is not highly reliable, whereas a fingerprint or iris scan is much more challenging to fake. Generally, however, the more layers of security, the better.
Advantages and disadvantages of 2FA and MFA
Advantages of using 2FA and MFA include, naturally, higher security and higher flexibility as both employees and customers can access systems from anywhere without risking their safety, reduced costs in help desks and security management, and increased credibility and trust from customers. 2FA and MFA are also convenient for customers, as they don’t have to go out of their way to authenticate themselves and most users have a mobile phone on hand. This creates a more frictionless experience for them, which also helps increase customer satisfaction.
On the other hand, customers want as few steps as possible when logging into their accounts, and it takes longer to go through various authentication steps. So, there has to be the right mix of security and speed. MFA also isn’t free for companies, and they can’t build a security tool like this themselves, so they have to outsource it to a third party. Luckily, various platforms offer 2FA and MFA, so there isn’t a lack of choice or availability in the market.
Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using various payment technologies and providers around the globe.
In a world where consumers’ payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or needs, Imburse will connect you to your choice of technology and provider.
Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.