Benefits Of 2FA In Finance

The scrutiny of financial services companies and banks has been growing in intensity over the past few years, as customers and industrial regulators start to have higher and stricter demands. This should come as no surprise, however, given that banking and financial services companies hold some of the most valuable data in the world. These institutions in the financial sector are major prime targets for criminals and hackers who desire to make hefty sums of profit from the sensitive information being stored in critical systems and applications. As a result, there is mounting legal and social pressure from consumers and the authorities such as the European Union’s General Data Protection Regulation. No corporation, be it big or small, can escape these tight laws and the watchful eyes of the general public who have entrusted their personal information over.

But, business owners of banking and financial services firms need not lose sleep over these circumstances. One simple yet efficient step into ensuring the digital security of the organisation and its services is through the use of two factor authentication (2FA). What 2FA provides is an extra step to the process of logging in and acts as another door of security. Even if hackers and identity thieves somehow manage to break past the first layer of security, 2FA is present to stop them as well as buy time for the IT administrators to activate countermeasures and shut down all malicious attacks. Usually, any competent and modern identity and access management solution will come along with 2FA capabilities.

Traditionally, there are three factors during the authentication process. The first factor is something the user knows such as the password they have created for themselves. The following factor is something the user has. This could be a mobile phone or any other device that is connected. The third factor is something that can be used to verify the user’s identity. Simply put it, this could range from the fingerprints of the user or even their facial features. How 2FA enhances IT security is that it utilises two of these three factors.

Applications and systems that have 2FA in place will require the user to provide an additional piece of information such as an email address or a mobile phone number, which will be accompanied by a password or PIN number. The most common approach is to use a time based one time password algorithm. A password is generated from a secret key which only works for a short amount of time. The user must therefore enter this generated PIN as they are logging in with their credentials before the time limit runs out. Once the PIN has expired, they have no choice but to repeat the whole process again. Other alternative methods can include prompting the user to provide a fingerprint or scanning of eye and/or facial features for recognition. Such methods are also known as biometric authentication.

The presence of 2FA methods can easily shut down repetitive attacks from hackers. It is no surprise that the top IAM solutions provide 2FA.