What Is Two-Factor Authentication (2FA), and How Can You Use it for Your Business?

Posted on March 1, 2023 by Access Growth

With cybersecurity attacks on the rise, it’s important that any business with online functionality take steps to protect itself and its users from those with malicious intent. One of the most common, and practical, ways of protecting a user’s account is with two-factor authentication. As the name implies, this means that the user will be required to take two steps to log in, at least on devices they haven’t logged in from before.

Two-factor authentication usually involves sending a separate login code to a user through their preferred method of communication. This is often set up through email, but with a  messaging API, developers can send the code to the user’s phone as well. In this post, we’ll take a closer look at two-factor authentication and why you should consider implementing it for your business.

What Is Two-Factor Authentication (2FA)?

With traditional authentication methods, only one code is needed to access the site: the user’s password. This presents a problem because passwords are frequently guessed or stolen. Passwords can be stolen through data breaches, such as other cybersecurity attacks, or through phishing attempts that trick unsuspecting users into giving the password to a malicious actor. 

When a two-factor authentication system sends the second code to the user, it is generated instantly. Every time the user logs in, a new code will be generated and sent through a channel that only the user has access to. This means that two-factor authentication codes can’t be stolen like traditional codes. 

Because of the extra step, most businesses allow users to specify when they are on a personal device—for example, a computer in their bedroom. Additional logins from that computer are assumed to be secure and don’t require the extra step. Removing the friction where there is little chance of a security threat helps improve the adoption of the technique.

Related: The Benefits of an SMS API to Send and Receive Business Text Messages

Use Cases for Two-Factor Authentication

Two-factor authentication is useful anywhere users may be logging in over the internet. However, the practice is more important for some industries than others. It may be mildly annoying for a customer to have their top score on an online video game compromised, but it will be much worse if their banking details are accessed by an unauthorized person. Below are some common areas where 2FA is a must:

Securing online banking and financial transactions

Customers trust their financial institutions to keep their money safe. If poor security leads to unauthorized access to their account, it could spell financial ruin for the customer. Even if a banking provider has fraud protection to eventually restore their funds, customers on fixed incomes can suffer dramatically from not having cash when they need it.

Protecting access to sensitive information in the healthcare industry

Privacy is one of the most important things in the healthcare industry. So important, that there are extensive laws all around the world that protect a patient’s personal information from falling into the wrong hands. Two-factor authentication prevents a simple stolen password from negating all of those privacy protections. 

Enhancing identity verification for online retail transactions

By requiring a second form of identification, such as a one-time code sent through an SMS API, 2FA can make it more difficult for fraudsters to access and use stolen credentials for online transactions. This can improve customer confidence in the security of the transaction and provide an additional layer of protection against fraud.

Secure access to enterprise systems and resources

End users logging into personal accounts only have access to their own information. Users on enterprise systems might have access to private data on all of a company’s customers. Security is extra important for these accounts because of the sheer amount of data that can be put at risk.

Enhance security for government agencies and their systems

Government agency credentials face much the same problem that enterprise credentials do; unauthorized access gives the attacker more information than a regular user account would. In the case of government agencies, this information could put lives at risk or compromise national security. 

Secure access to online accounts, such as email and social media

Many two-factor authorization codes will be sent to the user’s email account. If the email account is also compromised, the extra security provided by 2FA can be thwarted. However, when the email account itself is secured with 2FA, this becomes much more difficult for the attacker. 

Enhance security for remote workers and telecommuting

When the majority of workers still performed their duties at the office, businesses relied on the cloud less than they do in today’s remote or hybrid work environments. Now, remote workers log in through the internet for nearly every business-related activity they engage in. While this provides great flexibility for employers and employees alike, it also creates more avenues for malicious actors to attack your business. Two-factor authentication keeps them at bay.

Related: A Guide for Voice API for Developers

Why 2FA is Important for Your Company or Client’s Business

Despite the growing threats, some businesses are still reluctant to adopt the more secure login method. Whether they’re concerned with the effort of implementing it or the extra friction imposed on the user, they’ve held off on adopting the more secure method. We’ve discussed the benefits of two-factor authentication. Now let’s take a closer look at some of the consequences of poor security.

  • Loss of customer trust. Customers may lose trust in the security of the business if they are not offered the option of 2FA to secure their accounts. This could result in a loss of customers and a decline in business.
  • Non-compliance with regulations. Depending on the industry and location, failure to implement 2FA can result in non-compliance with privacy and security regulations, such as the General Data Protection Regulation (GDPR) and the Payment Card Industry Data Security Standard (PCI DSS). This can result in costly fines and legal consequences.
  • Increased costs due to security incidents. Without 2FA, the business is more vulnerable to security incidents such as data breaches, hacking, and identity theft. This can result in increased costs for remediation and damage control, as well as potential legal costs if the business is held liable for the breach.
  • Loss of competitive advantage. If a business’s competitors offer 2FA, they may have an advantage over the business in terms of perceived security and customer trust. This could result in customers choosing the competitor over the business.
  • Difficulty in attracting and retaining customers. Likewise, providing 2FA can be seen as a sign of a business’s commitment to security and customer trust, and a lack of 2FA can make it more difficult for the business to attract and retain customers.
  • Limitations on accessing certain systems or resources. In certain industries, not having 2FA in place may limit a business’s ability to access systems or resources that require a higher level of security, such as certain financial systems or government systems.

Two-Factor Authentication Implementation Tips

Once you’ve decided to implement 2FA for your business, it’s important that you follow some best practices to ensure that you get the security results that you want. The tips below will get you started:

Conduct a Risk Assessment 

Assess the potential risks to the business, such as the types of data being protected, the likelihood of a breach, and the potential impact of a breach. This can help you determine which 2FA methods are appropriate for your use case. 

Choose an Appropriate 2FA Method

Consider the different methods of 2FA, such as SMS, TOTP, and biometrics, and choose the one that best suits the business’s needs. For protecting highly sensitive data, you may decide that some methods aren’t secure enough for your use case.

Ensure User Awareness and Education

Two-factor authentication can’t protect a user that doesn’t opt to set it up. Ensure that all users understand the importance of 2FA and are familiar with how to use it effectively.

Regularly Monitor and Review 

Regularly monitor the implementation of 2FA to identify and address any potential vulnerabilities or weaknesses. The threat landscape is constantly evolving, and methods that were successful when you started the measures might not be as effective down the road.

Keep Software and Systems Up to Date 

Keep software and systems up-to-date with the latest security patches and updates to reduce the risk of breaches. This not only includes the software used in the implementation of 2FA but any software that can pose a security threat.

Have a Plan in Place for Breaches

Have a plan in place for responding to a breach, including procedures for quickly containing the breach, notifying affected users, and taking steps to prevent future breaches.

2FA is a valuable solution for a multitude of use cases, and implementing best practices like the ones above can make sure it’s used effectively.

Integrating 2FA Into Your Development Projects

Two-factor authentication is a simple yet powerful security measure that can significantly reduce the risk of unauthorized access to user accounts. With the increasing number of cyber attacks targeting businesses and their customers, implementing 2FA has become a necessity for any company with an online presence.

SMS and voice messages are two of the most common ways to deliver a 2FA authentication code to a user. To implement these in your company or client’s systems, you’ll need a telephony API provider you can trust. Flowroute has built a reliable network for connecting developers with voice, SMS, and MMS solutions. To learn more about how easy it is to integrate Flowroute into your systems, get started now.