How passwordless authentication offers next-level digital banking security and UX

Digital transformation Technology Security
Many financial institutions get weighed down believing that there’s no quick fix for going passwordless. And they’re not wrong. Passwordless authentication is a journey. But with the right partner, it’s about taking that next step, whatever it might be for your business.

While integrating and managing passwordless solutions may seem challenging, the risk of putting your passwordless authentication goals on hold comes at a much higher price — keeping your customers out and letting fraudsters in.

Let’s explore the options.

The increased risk of sticking with passwords

Passwords have long been the primary means of securing online accounts. However, since passwords comprise purely knowledge-based credentials, they come with several inherent flaws that make them susceptible to fraud attacks.

Passwords can be easily intercepted through methods like phishing, keylogging, or brute-force attacks. Moreover, users tend to rely on weak, easy-to-remember passwords or reuse them across multiple accounts, further compromising their security. This puts both financial institutions (FIs) and their customers at risk of unauthorized access and data breaches.
In addition to security concerns, passwords often create frustrating user experiences. We regularly hear from our customers how a high percentage of calls their customer service centers receive are related to forgotten passwords. Typically, after three unsuccessful username/password login attempts, the cardholder must contact their bank or credit union’s call center to reset their password.

Not only do forgotten passwords and the subsequent password reset processes lead to high cart abandonment rates and customer dissatisfaction; they also place a major burden on banking call centers in terms of both operational demands and lost growth opportunities.

Simplify and enhance digital banking security with passwordless authentication

Passwordless authentication solves not only the password-reset problem, but enables FIs to simplify the login experience for their customers while significantly decreasing the security risk associated with knowledge-based credentials.
Benefits include:
  • Improved user experience: Passwordless authentication streamlines the login process, eliminating the need for customers to remember and enter complex passwords. This reduces unnecessary friction, reduces cart abandonment rates, enhances customer satisfaction, and helps foster long-term loyalty.
  • Enhanced, multi-factor authentication (MFA) security: Passwordless authentication mitigates the risks associated with stolen or compromised passwords. By incorporating additional authentication factors such as device identity, biometrics, or push notifications, FIs establish a multi-layered security approach that actively keeps fraudsters out.
  • Cost and time savings: As mentioned earlier, password resets cause a great deal of frustration for both FIs and their customers. With passwordless authentication, the need for frequent password resets diminishes, reducing the amount of time and resources needed for password-related issues.
Leading tech companies like Google have recently shifted away from passwords, opting for FIDO-powered passkeys instead. Passkeys are a replacement for passwords that provide faster, easier, and more secure sign-ins to websites and apps across a user’s devices.
Unlike passwords, passkeys are simple, secure, and resistant to phishing attacks. Learn more in our passkeys fact sheet.

Entersekt's passwordless toolkit

Passwordless is the future for FIs and their customers. Regardless of where you find yourself in the journey to passwordless authentication, Entersekt can help with transitioning to the next step.

We deliver a layered, multi-factor approach to passwordless authentication. MFA, by definition, uses two or more of the following factors of authentication, which provides greater security and better experiences than passwords alone:
  • Knowledge: Something you know, such as a password.
  • Possession: Something you have, such as a mobile device, which Entersekt secures with its patented device identity technology.
  • Inherence: Something you are, such as biometric fingerprint or facial scans.
In fact, Entersekt offers a comprehensive toolkit for banks and credit unions that enables passwordless authentication, including:
1. Mobile app authentication: Entersekt's mobile authentication solution leverages push-based notifications and QR codes for authentication. Users receive a prompt on their trusted mobile device, confirming their identity and granting access to their accounts, with minimal friction.

2. Biometric authentication: Entersekt's toolkit supports various biometric authentication methods, including secure and user-friendly FIDO authentication for fast and smooth logins and transaction approvals via security keys or biometrics. FIDO leverages security keys or platform authenticators to provide strong cryptographic protection, ensuring robust security measures.

3. Push USSD authentication: We also offer authentication over the Mobile Network Operator (MNO) or Telco channel using push USSD technology. This method enables secure, app-free authentication without relying on passwords or physical tokens.

4. Risk-based authentication: Risk-based authentication, or RBA, makes use of silent risk signals and contextual data to deliver a risk score, which informs the level of challenge needed, and the challenge pass rate to determine authenticity. By analyzing various factors, such as location, device, and behavior patterns, FIs can dynamically adapt the authentication process to ensure optimal security.

In conclusion: Are you ready for the passwordless future?

Passwordless authentication represents the future of secure and user-friendly access to digital banking and other services. We understand that navigating the journey toward passwordless authentication may seem overwhelming, as achieving a true passwordless state requires the necessary technological infrastructure that accepts modern authentication methods.

The other significant challenge is rolling passwordless out in a seamless way so that your customers will use it — and it works. Partnering with an innovative technology provider like Entersekt can help remove the complexity and simplify this transition with access to our team of experts, innovative solutions, and ongoing support.
Learn more about our approach to passwordless authentication based on strong device identity.