Cyberattacks were one of the top five risks businesses faced in 2020. Cybercriminals are developing increasingly complex techniques to bypass security systems and infiltrate networks in hopes of stealing valuable data. As a result, there have been numerous reported instances of digital theft and data loss that have damaged businesses financially and hurt their reputation.
A report by Cybersecurity Ventures states that the global losses from cybercrime are expected to exceed $6 trillion in 2021. It’s clear that businesses need to heighten up their security to keep their company and customers safe. One of the easiest measures to take — and simplest to set up — is two-factor authentication.
What is two-factor authentication?
Two-factor authentication (2FA) is an authentication method in which a user is not granted account access until they enter their password and provide another form of identification (for example, they might need to scan their fingerprint or prove they have access to a security token). Since passwords are often stolen and are therefore no longer enough to secure accounts, implementing a two-step authentication procedure decreases the likelihood of unauthorized access to a person’s account and helps organizations better guard against cybercrimes that occur due to phishing or human error.
Two-factor authentication statistics
Two-factor authentication lessens an organization’s risk of a data breach while helping consumers avoid account takeovers. Most businesses and government entities could benefit greatly from instituting two-factor authentication into their workflow, but unfortunately, many have yet to adopt it.
Here are some ways two-factor authentication is influencing businesses, organizations, and consumers.
Two-factor authentication by industry
Two-factor authentication can be especially helpful for high-risk industries, which strongly rely on data protection. Let’s explore the security risks faced by different industries and how two-factor authentication can help divert them.
Customers depend on financial institutions to safeguard their data. However, these institutions are also 300 times more likely to encounter a cyberattack.
Data breaches at financial institutions give cybercriminals access to sensitive information, such as credit card details, Social Security numbers, and users’ personal data. Bad actors can then use this information to commit account takeover fraud, which takes an average of 16 hours to resolve. This is why it’s important for financial services to employ a two-factor authentication system to protect user accounts.
38% of financial services respondents believe that advancement in technology has increased information technology security risks. However, organizations can protect themselves against unauthorized logins, internal threats, and external attacks with two-factor authentication.
With a two-factor authentication system, businesses that offer financial services improve customer relationships by strengthening their trust.
The healthcare industry also attracts cyberattacks, as it deals with confidential patient information, such as medical records and credit card details. Research shows that approximately 79% of all reported data breaches were made in the healthcare sector, and the industry was expected to spend over $6 trillion in damages from 2017 to 2020.
Two-factor authentication can help healthcare facilities avoid data breaches, as the hacker would need both the password and a code or symbol sent to the authorized user’s phone. This system can be instrumental in safeguarding the personal records of patients and employees in the healthcare industry.
As the ecommerce industry grows, the number of cyberattacks and data breaches is also rising. In fact, statistics show that ecommerce retailers deal with an average of 206,000 web attacks per month, and the damages encountered from ecommerce fraud are expected to reach $6.4 billion by 2021.
Ecommerce businesses can greatly benefit from a two-factor authentication system, which can be used by both customers and employees. In addition to protecting confidential information, two-factor authentication can help build customer trust and make it harder for hackers to attack.
The government sector is extremely vulnerable to cyberattacks, as government institutions have access to a plethora of confidential information, including financial and military data. In 2018 alone, 1.2 billion government records were breached through cyberattacks.
Unsurprisingly, American government organizations spent $18.88 billion in recovery costs and downtime in 2020 following a cyberattack. With two-factor authentication, the government can safeguard employee accounts from internal and external threats, primarily offering protection against account hacks and phishing attacks.
Benefits of two-factor authentication
Two-factor authentication protects organizations by reducing the likelihood of unauthorized access, which can occur when users share passwords or fall victim to phishing attacks or data breaches. According to Google, using two-factor authentication blocks 100% of automated bot hacks.
Employing this practice also makes it easier for businesses to run remotely, as employees can access company systems safely from anywhere.
Additionally, two-factor authentication can help save companies time and money by reducing the chances of being hit with a data breach — as of 2020, the average cost of a data breach rounded up to $3.86 million, and they also can significantly affect a company’s reputation. Research shows that 49% of customers refused to sign up with an online service that had incurred a cyberattack. This is where two-factor authentication can help. As 2FA can reduce the chances of unauthorized access, your company can better safeguard the customer’s personal data.
Limitations of two-factor authentication
There are certain limitations to using 2FA, though. On its own, it can’t prevent all types of fraud — individuals can lose their tokens, and some facial authentication methods can be tricked via masks, deepfakes, and other approaches.
Additionally, while two-factor authentication can make it harder for bad actors to take over accounts, it doesn’t tell you whether the person signing up is actually who they say they are. This is because the model works under the impression that only the authorized user will have access to known devices, which is often not the case. A hacker could easily access an account if they have access to the sim card registered with the two-factor system.
Get added protection for your business
To best protect your business and customers, it’s important to implement multiple security measures. One way to do this is by pairing two-factor authentication with an identity verification platform that offers a combination of active, passive, and behavioral signals to provide a holistic view of your customers, such as Persona.
Identity verification is a process that ensures an individual is actually who they say they are — not just someone who has access to information about that individual. At Persona, we offer trusted identity infrastructure that gives businesses the building blocks they need to securely collect, verify, manage, and make decisions about individuals’ identities, along with automation and orchestration tools to streamline the entire process from end to end.
In addition to traditional means of verifying identities, such as passports and government IDs, we also allow companies to evaluate other fraud signals, such as individuals’ browser fingerprint, phone type, location, and number of verification attempts. With the combination of two-factor authentication and identity verification with Persona, your business can better arm itself against data breaches.