The Bulk SMS team explains how 2-factor authentication (2FA) helps businesses combat fraud, and the crucial role that SMS plays in 2FA.
It is predicted that cyberattacks will cost companies $6 trillion by the end of 2021 – and let’s face it, anyone with an internet connection is a potential target. This means every business with an online presence needs to add extra layers of security to protect their data and processes against attacks, breaches, and even unintentional staff errors.
Commonly referred to as Two-Factor Authentication (2FA), the process of sending One Time Pins (OTPs) is useful in verifying a user’s identity before allowing them to complete an online task. Over the years, SMS has established itself as a popular channel for sending OTPs because it’s affordable, reliable and probably most importantly, it’s accessible.
Here are the 3 typical ways we see organisations using 2FA:
1. To protect critical business processes
Businesses are automating their internal processes and workflows to improve efficiency and reduce human error. 74 per cent of organizations worldwide claim they are susceptible to insider threats, with 2 out of 3 incidents being caused by negligence. To safeguard critical processes and prevent careless mistakes, many businesses have introduced 2FA. By simply adding the additional step of inputting a code to complete a process – particularly in a financial workflow – risk is minimised, and costly errors are prevented.
2. To verify identity
Whether it’s a customer logging in and completing a purchase, or a staff member approving an action, it is crucial that only the right person with the right privileges can gain access to the relevant information.
Even though login credentials are always needed, a single password is often not enough. Research shows that 63 per cent of all organizational internal data breaches were due to compromised usernames and passwords. This makes sense when you see that Microsoft reports that 73 per cent of people online use duplicate passwords across various platforms, leaving themselves exposed to potential breaches. To add an additional verification process, companies send system-generated OTPs via SMS to the user authorised to complete a process. Not only does this quickly notify the receiver that action is needed, but a record is kept of who authorised the process and when.
3. To secure payments
Probably the most common use of 2FA is to secure online payments. Banks and Financial Service Providers (FSPs) have been sending OTPs to their customers for years. Now that most businesses have a digital element and e-commerce is booming, the need for safer payments and transactions is becoming a priority for any business online, not just FSPs. By using tokens that substitute the customer’s sensitive data, like credit card information, for a randomly generated alpha-numeric code (token), businesses can offer more security for customers completing online purchases.
Why SMS is popular for 2FA
Although SMS was not originally designed as a method for sending secure information, it has certainly evolved into one of the most trusted tools to do just that. It has several qualities which make it the perfect solution for any business:
To find out more about how we can help you to implement SMS 2FA with your application or software, contact us today!