Before understanding why passwordless authentication is better for businesses, let's list essential factors that define authentication effectiveness for businesses:
- Ease of access for users
- Authentication security to protect users' accounts and business applications
- The cost associated with the overall authentication experience
Decades of studies, experiences, and data show that password authentication has lacked in all these essential aspects of authentication for business, and here is a glance at how:
- Inconvenient: Passwords are incredibly inconvenient to create, remember and manage across all the accounts for users. These inconveniences lead to frequent forgotten password cases requiring users to reset their passwords — typically involving users performing 2-4 additional steps to access their account — thus reducing the ease of access for the user.
- Security is a big challenge: Password authentication presents security challenges as it is prone to various cyber attacks such as brute force attacks, dictionary attacks, rainbow attacks, credential stuffing, phishing and keylogging. According to a very recent Statista report, in the first half of 2022, nearly 53 million individuals were impacted by data vulnerabilities such as data leakage, breaches and exploitation, mostly because of compromised credentials or unauthorized access.
- Higher soft and hard costs of password authentication: The higher soft and hard costs caused by password reset efforts and lost productivity combined with the aforementioned factors reduce the return on investment (in authentication) for businesses.
Passwordless authentication solves all the problems mentioned above for businesses, which is why it has been proven a better choice for business environments. As a result, businesses today are progressively shifting towards passwordless authentication, eventually leading to a password-free future. Now that we have discussed why passwordless authentication is better than password authentication, let's discuss what it is exactly and how it benefits business environments.
Passwordless authentication enables users to log in and access IT resources, systems or applications without using passwords. The user instead offers another form of authentication, like a biometric, proximity badge, OTP, magic link login or hardware token code.
Passwordless authentication can increase security and simplify user authentication since these factors don't need to be remembered and are nearly impossible to copy or steal. Here are the benefits of passwordless authentication for businesses:
Enhanced cybersecurity approach
Passwordless authentication improves the cybersecurity approach for businesses since it can effectively reduce the data and identity theft caused by unauthorized access compared to password authentication. Password security risks rely highly on user password authentication, and passwordless authentication successfully reduces this dependency. Also, the absence of passwords eliminates the business need for managing password storage and fulfilling password regulation requirements.
Prevention of password-based attacks
Passwordless authentication uses various authentication techniques that lessen the possibility of being the subject of password-based attacks. The absence of passwords automatically reduces the attack vectors and protects against brute force attacks, dictionary attacks, rainbow attacks, credential stuffing, phishing, and keylogging.
Business environments are the primary targets of password-based attacks to gain access to sensitive and confidential data. Nearly 91% of all reported cyberattacks start with phishing scams, making it the most common type of password-based attack.
Lower long-term expenses
Passwordless authentication eliminates unwanted password-related expenses for businesses. Password-related costs are the amount of money and effort businesses spend on password storage and administration. This also includes the time IT spends addressing the frequently altering legal requirements for password storage and handling password resets.
According to Forrester Research, U.S.-based businesses set aside more than $1 million yearly for password-related support expenses. Microsoft collected its cost data before and after passwordless and found that it reduced authentication costs (hard and soft) by 87%. Also, with passwordless authentication, cybercriminals' cost of authentication attacks went up.
Seamless user experience
Users have several accounts with various businesses depending on their needs, and remembering all these passwords has become impractical. As a result, they often forget and reset passwords, making it an unpleasant user experience for them.
Contrarily, users no longer need to create or memorize complicated passwords when using passwordless authentication. Instead, they can use their mobile, email or biometrics to authenticate, making logins more seamless and boosting the overall experience.
It is safe to conclude that businesses will ultimately gain from passwordless authentication. However, while adopting passwordless authentication, businesses must follow a step-by-step approach and adhere to regulatory standards and compliances. Depending on the business requirements of implementing passwordless authentication, they can choose from in-house development and deployment of passwordless authentication systems or SaaS passwordless authentication solutions available in the market.
Passwordless authentication is becoming more popular among businesses prioritizing their users' and employees' security and digital experience. According to a Statista report, passwordless authentication market revenue is anticipated to reach $25.2 billion by 2025 and rises steadily to around $53.6 billion by 2030.
Based on this estimation, many businesses are becoming aware of the vulnerabilities of passwords and are working towards eventually achieving a password-free future. Even though the overall transition to a password-free future may appear to be difficult, the benefits and positive impacts it offers businesses are enormous.
Originally published at Entrepreneur