Multi-Factor Authentication: Strengthening the Security of Your Banking Accounts

In a world that is digitally connected, safeguarding one’s personal and financial data is crucial. These days, most of the banking transactions are done online. This makes the banking IDs and passwords vulnerable to cyber attacks. It is therefore very important for every bank/financial institution to implement Multi-Factor Authentication (MFA) to reduce cybercrimes. This blog explores the different types of MFA that can be used by banks to safeguard customer and financial data.

Understanding Multi-Factor Authentication (MFA)

MFA is a security technology where users have to provide additional information to verify their identity when they log into accounts or transact. It acts as an additional layer of protection that makes unauthorised access difficult. Federal Bank offers a two-factor authentication service to its users, thereby ensuring the security of its customer's data.

Different Types of Authentication Factors

MFA uses a combination of two or more authentication factors to make the banking account and transactions more secure. The three different types of authentication factors are:

1. Knowledge factor: It refers to something that is known only to the user like username and password.

2. Possession factor:It refers to something in possession of the user like a security token or mobile device.

3. Biometric factor:It refers to the use of the user’s unique physical or behavioural characteristics like fingerprints, voice or facial recognition.

Step-by-Step Guide to Set Up Multi-Factor Authentication

The user must enable any of the MFA methods in the settings of the online bank account. Here is a step-by-step guide to setting up an MFA using different methods:

1. Biometric authentication

Account holders must make sure that their devices like tablets or mobile phones support biometric authentication methods such as fingerprint or facial recognition.

2. One-time password (OTP)

This is the simplest form of MFA security. Once enabled, a one-time numeric code is sent to their mobile device or email which has to be submitted for verification post typing in the password.

3. Hardware tokens and security keys

A few bank accounts provide physical devices like hardware tokens or a security key.

4. Mobile Authenticator Apps

Users can download and instal a mobile authenticator application on their smartphone. Users have to scan their bank account QR code using the authenticator app. This links the account with the app. When the user logs in to the account, the app generates a code that needs to be entered as the authentication factor.

Best Practices for MFA Implementation in Banks

Some of the best practices for MFA implementation include:

· Banks must assign MFAs based on the risk level of transactions. High-risk transactions would need stronger authentication.

· User-friendly MFA methods like biometrics can be implemented.

· Banks must educate their customers regarding MFA, and its importance. They should also give clear instructions on how to set it up.

· Banks must always have backup questions and codes in case the MFA method fails at any time.

· The MFA systems must be monitored regularly for inconsistencies and new security measures can be introduced when required.

Advantages and Limitations of Multi-Factor Authentication

Listed below are some of the advantages and limitations of MFA.

Advantages of MFA

· It reduces the impact of a weak password

· It can warn against potential breaches

· It improves security and protects against phishing attacks

· It helps banks maintain the data security standards and meet the regulatory requirements

Limitations of MFA

· A few MFA methods might be time-consuming and frustrate the users

· MFA systems can be expensive

· In situations where the MFA fails and the backup methods used are less secure, the accounts become vulnerable to cyber-attacks

· It is dependent on devices. In case of loss of the device, authentication cannot be done.

Conclusion

MFA is a very important tool that every bank must implement to fight against cyber threats. It acts as an additional security layer and ensures only the right people can access the accounts and data of a bank/financial institution. Federal Bank ensures its customers' data and transactions are secure by offering them three different authentication factors to choose from. Click here to know more.