Data breaches are some of the leading causes of financial losses for businesses. According to a UNCDF report, the economic cost of information breaches in 2020 was a huge $4 – $6 trillion, representing 4% of the global GDP. Understandably, cybersecurity has become a major focus for companies looking for ways to mitigate these losses. Statista reports that IT security spending amounted to $71.68 billion in 2022 and will increase to $76 billion in 2023.
One of the mitigating measures is 2-factor authentication. 2FA strengthens passwords by generating a different passcode or number sequence to verify the identity of a user or confirm a transaction.
This blog post examines the meaning of 2FA and how it can benefit your business.
Understanding 2FA for Businesses
As the name implies, 2-Factor authentication or 2-step verification is a security measure that requires two unique steps before permission is granted to secure details. 2-Factor became necessary following the failure of single-factor authentication to protect user details adequately. Single-factor authentication usually consists of a password or passkey, which hackers easily compromise. Using 2FA gives additional security cover, such as a token-generated number sequence or implementing a One-Time Password sent as SMS.
Attacks on personal accounts by cybercriminals have increased the use of 2FA by companies in the Banking, Financial Services, and Insurance industry to guarantee the security of transactions for their customers.
Types of 2FA
There are different 2FA mechanisms to choose from. The two main categories of 2FA are hardware devices and software. We will consider them in detail to help you choose the one suitable for your business.
Hardware 2FA tokens
A hardware token is a portable device issued to customers to generate unique codes to authenticate transactions. The device works by receiving signals from the website to generate the code, which works along with the password provided by the user. An example of a hardware token is a smart key card that uses RFID to communicate data. Others are Bluetooth tokens and NFC tokens.
The downside to hardware tokens is the high expense of buying and distributing them to customers. Also, it is easily misplaced due to its small size.
Push notifications
A push notification is usually sent when you attempt to use your login details to access your email account or bank account. The account owner receives a message on their phones requesting a confirmation that they are trying to log in. A push notification quickly notifies users of a phishing or hacking attack.
SMS and Voice 2FA
SMS 2FA is usually in the form of One-Time Passwords sent via SMS to verify transactions. Voice 2FA authenticates a process through a phone call. Authentication Apps
These third-party apps are linked with other websites to generate secure codes. The customer can download an authentication app that prompts a verification code to add to the user’s password.
Importance of 2FA for Businesses
So what do you stand to gain from using 2FA for your business? Let’s have a look.
Reduced incidence of data theft
An additional layer of security makes it harder for hackers to hijack user data. Cybercriminals are getting more sophisticated, and using a single password is insufficient protection from attacks. Weak passwords are often the reason for breaches of user data. 2-Factor authentication takes care of these problems and reduces the incidence of data breaches.
Puts security in the hands of customers
Whichever 2FA mechanism you decide to use for your business, the security of customer data is within their control. For instance, SMS for 2FA means the customer is always responsible for security. Even if their password is hacked, with the help of 2FA, they can recover their password and prevent unauthorized access.
Increased credibility for your business
Security of transactions is a major concern of customers of online marketplaces. A business that cannot guarantee the security will lose customers. On the other hand, a brand with a strong 2FA system is highly rated by customers and enjoys free word-of-mouth marketing by customers.
Cheaper cost of customer support
Most calls customers make to business help desks are related to password resets. Integrating 2FA into your business processes will lessen the need to call customer support. Customers can always recover hacked passwords or create new ones to protect their data. Using 2FA, you don’t have to hire many customer support officers for your business.
Final Thoughts
The importance of 2-Factor authentication cannot be overstated in securing customer data. The benefits for businesses make it a no-brainer for any smart business owner. Customers often put their details at risk with weak passwords and carelessness in handling sensitive details. This forces the business to step in to safeguard these details to retain customer trust and save costs from losses arising from hacked accounts. To fully integrate 2-Factor authentication into your business, you need to partner with a company like BSG with the know-how for executing this task. You can use our SMS 2FA solution to secure your customer details fully.
