Quarantine protocols during the COVID-19 pandemic have limited in-person activities, causing the rapid increase in digital financial services. With many new users signing up on their platform, digital banks and financial technology (fintech) firms must ensure that only legitimate clients can utilize their services. Moreover, they must also deliver a frictionless and hassle-free experience to meet the changing demand of modern consumers.
Still, various financial institutions continue to rely on conventional identity verification methods like passwords to prevent unauthorized persons from using someone else’s account. However, this outdated authentication process does not confirm that the person is the real account owner. It only verifies that they know the login credentials.
Once a criminal succeeds in taking over a customer’s account, it can lead to significant financial losses and other costs like reputation damage and customer dissatisfaction.If financial institutions want to go truly digital, they must shore up their digital defenses with passwordless login compliant with FIDO2 authentication standards to curtail fraudulent attacks while ensuring customer satisfaction.
FIDO2’s multi-factor authentication (MFA)utilizes a combination of other login credentials that bind identity to the devicelike inherence factors (biometrics) and possession factors (cryptographic keys stored on a registered device). Some also use knowledge factors like a stored pattern swipe. Unlike passwords, these authentication factors are not easily circumvented or stolen.
During account enrollment, customersopt for passwordless login.They can simply use their camera-enabled mobile device to take a selfie and scan an identity document to complete the facial biometric identity proofing procedure. They will also undergo an active liveness confirmation to determine their real-time presence.In under a few seconds, the customer’s identity is confirmed and cryptographic keys are established, creating a digital chain of trust.
Going passwordless enables digital financial services providers tokeep up with the fast-changing industry trends and practices. For more information on the matter, see the following infographic from authID.