Account takeover and fraud schemes are costing consumers, banks, retail organizations, healthcare and other online businesses billions of dollars each year. What’s more, the cost of these attacks is on the rise—according to Riskified, losses from account takeover rose 122 percent from 2016 to 2017 and increased by 164 percent the following year.
Threat actors have devised simple and extremely effective means of using stolen passwords from a breach at one institution to take over accounts at numerous other businesses all over the Internet. While security leaders are aware of this risk, they’re in a difficult spot trying to address the threat without introducing friction into the customer experience. Organizations can’t afford to ignore the growing risks associated with account takeover (ATO). But at the same time, it’s critical that they handle ATO without chasing their users away by providing a poor customer experience at login.
Two-factor authentication (2FA) is being championed as a means of addressing account takeover schemes and other security vulnerabilities, as it forces people to use something other than a password to confirm they are who they say they are. But the reality is that users perceive 2FA to be a burdensome technology that detracts from their experience and, when given the choice, many prefer not to implement it. Case in point, according to Google, fewer than 10 percent of its users have signed up for 2FA to protect their Google accounts.
As digital transformation efforts continue and customers demand an ever-increasing high-quality, seamless online experience, we can only expect more users to grow more frustrated with the friction introduced by 2FA. As such, in its current form, it’s clearly not the right approach for ensuring security while also keeping the quality of the customer experience at the forefront.
While other authentication methods use different avenues to verify users’ identities, many of these approaches still introduce frustrations into the customer experience or have inherent vulnerabilities. For example, adaptive authentication cross-references a variety of metrics—IP address, geolocation, device reputation, etc.—to assign a risk score to an initial login attempt and determine additional authentication factors as a result. The approach sounds good in theory, but these systems tend to be tuned aggressively to increase effectiveness, meaning that additional authentication steps are frequently added in relatively benign cases—irking customers and often leading to abandonment.
Biometric authentication is appealing from a customer experience standpoint. However, these systems typically default to password-based authentication should the biometric fail or be unavailable. As a result, biometric authentication does little to mitigate the threat of bad passwords. It also introduces a broader security question: since biometric data cannot be changed, what happens if it falls into the wrong hands? The recent Biostar 2 breach, which exposed biometric data of more than a million users, underscores the security issues associated with this approach if data is not properly hashed and encrypted.
So, what can organizations do to strike the right balance between ensuring security without compromising the user experience?
The fundamental challenge of protecting online accounts is password reuse. The average user likely knows better than to reuse the same password across multiple sites, but the human desire for convenience and ease of use will trump this knowledge every time. As such, companies should try to determine whether the existing username and password pairs have been exposed, while simultaneously exploring ways to augment 2FA, adaptive authentication and other authentication methods to be more user-friendly.
With this approach, customers can enjoy a quick, hassle-free login every time they attempt to gain access to the account (assuming that their passwords have not been compromised). Should the credentials be exposed, companies can step-up authentication to protect and enable the initial access, and then prompt the user to change his details for future logins.
Our modern, digital world demands a modern approach that ensures the security of digital accounts while simultaneously prioritizing the customer experience. In addition to the security benefits, a user-centric security approach also helps IT teams get buy-in from other lines of business. Once marketing and sales have an assurance that customer friction will be eliminated unless critically necessary, these departments are much less likely to fight against the introduction of new account protection technologies.
With the threat—and cost—of account takeover schemes increasing on a yearly basis, it’s essential that companies thwart these attacks without compromising the user experience. In a competitive marketplace in which too much customer friction can lead to brand abandonment, organizations only have one shot to get it right.
