The Perils Of “One-Size-Fits-All” Authentication

Businesses face an array of challenges when authenticating customers, often because they rely on a single security stack.

Recent research by PYMNTS found that more than half of peer-to-peer (P2P) lenders, 47% of banks and credit unions and 43% of car dealerships using authentication systems discovered people using false identities.

Meanwhile, 37% of banks or credit unions, a third of auto dealers and 28% of P2P lenders said their digital authentication processes are not as effective they could be. As many as 41% of these businesses reported bad customer experiences with digital authentication.

If failures of authentication accidentally admit bad actors, it can cost businesses millions. Subpar customer authentication is one of the chief causes of these data breaches, with compromised credentials causing a fifth of all breaches, more than breaches resulting from phishing and cloud misconfiguration.

And it’s not just companies that are harmed. In 44% of the breaches, customers had personally identifiable information leaked. Establishing a multilayered security and authentication system is vital for any company that wishes to keep its customers’ trust. Behavioral analytics can be a essential component of this shield.

And the defenses your organization employs should be as diverse as the range of tools bad actors use to breach them.

For example, biometrics can confirm that customers’ identifying documents match their physical images, but some fraudsters have fooled facial-recognition systems with photos or videos of their intended victims. But biometrics coupled with multi-factor authentication requires more information for fraudsters to carry out successful attacks. Research shows merchants have been able to reduce fraud by 71% and total fraud losses by 12% by leveraging multilayered solutions.

Behavioral analytics should be an integral part of multilayered security systems, providing a second line of defense after customers have been authenticated using tools such as biometrics or multi-factor authentication.

Research by Neuro-ID found that a Softare-as-a-Service provider lowered its fraud rates by 35% by with the help of a behavioral analytics engine that worked the company’s existing password-based system in a multilayered security network.

For more on the benefits of behavior analytics, download the Monetizing Digital Intent Tracker, a PYMNTS and Neuro-ID collaboration.