The global fraud detection and prevention market is predicted to be worth an astounding USD 38.2 billion by 2025. One of the driving forces behind the growth of this market is the large scale adoption of cloud by large enterprises. According to Cisco, 53% of organisations have hosted more than 50% of their technology infrastructure on cloud.
Even consumers prefer online interactions. For instance, when it comes to consumers of financial institutions, more than 35% of respondents stated that they would prefer opening online accounts.
Although there are multiple benefits of adopting the cloud such as scalability and cost optimisation, organisations on the cloud also become susceptible to security breaches and fraudulent activities such as identity theft. Identity theft has emerged as one of the leading causes of fraud. In 2019, according to the Federal Trade Commission, identity theft comprised more than 20% of the 3.2 million fraud cases that were recorded. During the same year more than 160 million records of personal data were compromised through data breaches.
Therefore, organisations across the board must strongly contemplate on adopting ID authentication as a part of their fraud prevention measures.
What is Authentication?
Authentication is the mechanism of recognising a user’s identity by validating incoming credentials against pre-existing identifying credentials of the same user stored in a database.
Authentication is generally carried out after identifying and verifying an individual’s identity. There are three kinds of authenticators most systems rely on:
- Security questions or high-security passwords (that only the user knows)
- Any badge or cryptographic key that the customer has
- Facial recognition, fingerprints, or biometric data
Types of Authentication
- Password-based authentication is the most common form of authentication. It is also the cheapest method of authentication. Certain alphanumerical credentials can be used to increase security. Any password saved on a site/network should be encrypted to prevent data theft.
- Biometric Authentication provides maximum security as it involves physiological statistics like a fingerprint, facial recognition or retina scan. This authentication process has the lowest susceptibility to risk since it is excruciatingly difficult to replicate a user’s physical or behavioural characteristics.
- Device-Based Authentication is carried out by certain portable hardware devices similar to credit cards. These smart cards are carried by the user and are verified using a card reader. It requires a PIN and gets locked if an incorrect pin is entered. One can block the card in case it is stolen. This offers medium to high security and is an effective way to reduce financial frauds carried out during transactions.
How is Verification different from Authentication?
Identity verification answers the question ‘Are you a real human?’, whereas Identity authentication answers ‘Are you who you say you are?’ Verification is generally a one-time process whereas authentication is required regularly and repeatedly. While verification is done during an individual’s first interaction with the system, authentication occurs every time one tries to log in. The primary objective of verification is to make sure that a real person using the system exists while the primary objective of authentication is to ensure that the person who is logging in has the right to access the system.
Two-factor Authentication
While the system of inserting a username and a password would suffice for some authentication systems, there are certain high-security authenticators to ensure a person’s true identity. Different institutions require different authenticators. For example, a social media account would only require the username and the password, but a bank account would require your documents of identification. Since data contravention has made much of the private data readily available, lower level authenticators are of no use.
Two-factor authentication (2FA) requires correctly entered login credentials in addition to a verification check. One time password (OTP) is one method of a verification check. This ensures that the user or someone who is accessing the user’s phone is logging in. In many organisations, repeated procedures are carried out to re-verify a client’s identity. It then allows the organisation to ensure a trusted identity. However, this process would not be prudent as every time a client interacts with an organisation, they would be required to undergo an ID authentication. This can be costly, time-taking and can break the link between transactional environments.
Identity Authentication Services
PINs, OTPs, passwords or traditional two-factor authentication methods can be inadequate and be highly vulnerable to data breaches, misleading identity thefts and financial fraud. Identity Authentication Service (iAS) is a common and efficient service provided by the Solution Delivery Division that delivers a suite of authentication and authorization services. It serves millions of users and provides a robust mechanism for secure authentication. Its key benefits include-
- Digitization, automation and auditability of application access request forms
- Consistent user authentication across all the applications
- A high-performance system built on a scalable architecture.
- Simple and fast user authentication
- Customised authentication and easy workflow
Benefits of ID authentication
The number of global data breaches has skyrocketed in the past few years. The 2019 Data risk report found that several companies still maintain thousands of unprotected files which are easily accessible. In 2018, more than 5 billion data breaches were discovered. ID authentication provides high-level accuracy and security and better compliance. Through ID authentication, customer abandonment remains evident. For example, reportedly, 56% of the total consumers in the UK abandoned bank applications in 2018. Traditional KYC and due diligence processes are at least partly to blame. It ensures high-security transactions, logins, transitions and transfer of data, money, documents or any private information. For Multinational Companies, it is a necessity to ensure authentication before any submission/entry of a person/party.
In a nutshell, ID authentication is the process of verifying the claimed user identity by checking the credentials provided by the user. It is an essential procedure as true identity verification with effective authentication can help in safe and secure transmission of data. Through authentication, fraudsters are kept at bay while solid and verified connections are established.