Password logins are an outdated method to authenticate a person’s identity due to how easy cyber thieves can steal a person’s login details through phishing attacks. This is because most people reuse their passwords since they do not want to remember many different passwords for different accounts. They also tend to use simple passwords so they will not have to remember complicated passwords with special characters.
Some thieves do not even have to conduct phishing attacks to find out some people’s passwords since they only have to guess the password from about 200 of the most common passwords used worldwide. The fact that many people reuse their passwords for other accounts, including their banking accounts, makes things worse since one leaked password can lead to severe data breaches and lead to fraudulent account takeovers.
Shifting to a passwordless login solution allows banks to safeguard their customers’ bank accounts and keep other people from accessing them even after a successful phishing attack. Passwords are no longer effective as an identity authentication solution. Banks must shift to using passwordless and biometric identification solutions to comply with several regulations as part of their due diligence.
Financial firms can achieve the shift through FIDO 2.0 authentication that leverages different authentication solutions, including biometric identification, cryptographic keys, and pattern swipes. FIDO 2.0 cryptographic login credentials harness commonly used Android and iOS devices with facial and fingerprint recognition support for a simpler authentication experience.
Login access is limited to a user-registered device and a secondary biometric factor to unlock the FIDO cryptographic keys. Even if many passwords are leaked, the account holders will not have to worry about their bank accounts getting compromised.
Continuing to use passwords as a primary identity authentication solution will compromise data security and increase the chances of fraudulent account takeovers. For more information, see this infographic by authID.