What Is Two Factor Authentication (2FA)

What Is Two Factor Authentication (2FA), And How Does It Benefit Companies?

Identity theft, hacking, and phishing attacks are all on the rise and cost individuals and businesses billions each year. A successful hacking attack typically costs the businesses that are its victims more than money. There is the additional expense, more challenging to quantify, of a damaged reputation as customers lose confidence in the company’s ability to keep their data private and secure.

The Impact of Hacking Attacks on Business

According to a recent study by Lloyd’s of London, global hacking attacks cost businesses more than $400 billion each year. Those costs are multiplied by the expensive measures companies take to ensure the security of their data. For example, companies spend more than $75 billion each year on cybersecurity.

Small Businesses Are Not Safe From Hacking 

Until recently, those attacks were targeted primarily against multi-national corporations, but increasingly, cybercriminals are going after small businesses.  In 2013, 44% of small businesses reported at least one hacking attack, according to the National Small Business Association.  While large corporations can absorb the losses associated with a hacking or phishing attack, for small businesses, such attacks can be devastating regarding financial losses and damage to their reputation.

Identity Theft Affects Millions and Is Increasing Every Year

Cybercrimes affect not only businesses. According to the US Bureau of Justice, more than 17 million individuals were victims of identity theft in 2014, mainly through the hacking of their credit or debit card accounts. According to Business Insider, identity theft cost individuals almost $25 billion in 2013, $10 billion more than property theft.

The increase in recent years of hacking attacks on businesses and identity theft aimed at individuals has caused many companies to wonder if they can do anything to protect their data. Fortunately, there is a way for businesses to protect the privacy of their customers and the security of their personal information.

What Is Two Factor Authentication (2FA)?

Two-factor authentication, the latest advancement in information security systems, makes it more difficult for thieves to access customer data. Most security systems require customers to verify their identity by providing a password and User ID.

Two-factor authentication provides an added layer of security by requiring system users to enter additional information that only the user has, such as something only the user knows, like a PIN or answer to a security question; something they have in their possession, like a mobile phone or ID card; or a physical characteristic, like their fingerprint or voice.

Experts Agree:  Two Factor Authentication Protects Data Better

Following the 2013 hacking attack on the Saudi oil giant Saudi Aramco on Twitter. Experts agreed that it was time for Twitter to join other social media sites like Google in implementing two-factor authentication.  In an article with the title, “Following breaches, experts call for two-factor authentication on Twitter,” Chester Wisniewski, a senior security adviser for the security firm Sophos, wrote:

“It is high time Twitter implement something to augment account security. Two-factor authentication would be a great option for protecting high-profile brands, celebrities and those who simply want that extra layer of security for their online identity.”

The Benefits of Two-Factor Authentication

Two-factor authentication is relatively inexpensive to implement and offers several important benefits to help businesses protect the security of their data. Here are 4 of the most important benefits of two-factor authentication:

Improved security:  passwords and user ID numbers are relatively easy for cyber thieves to access.  Many people, for example, are afraid of forgetting their passwords and writing them down in one or more places thieves can find.  Two-factor authentication makes it more difficult for thieves to steal customer data with features such as one-time passwords (OTPs), suitable for only one login, information only the user has, or personal characteristics like fingerprints, which thieves can’t duplicate.

Increased worker productivity: Because two-factor authentication makes data more secure, companies are more confident about permitting their employees to work remotely. According to the Harvard Business Review, when the Chinese travel website Ctrip allowed its employees to work remotely from home, their productivity increased on average by more than 13%, and the company saved almost $2,000 per employee while also improving employee retention.

Reduced operating costs:  two factor authentication makes businesses more efficient and reduces operating costs.  For example, because there are fewer password resets, customers don’t need to call help desks as frequently.  In addition, companies spend less time contacting customers about suspicious activity on their accounts.  Finally, companies spend less money on expensive fraud review systems.

Customer satisfaction: Customers are naturally attracted to businesses that are better able to secure their data. When they see that a business requires additional security information, they feel protected and feel more positively about that business for ensuring their information is secure. Those positive feelings add to customer trust and boost customer retention.

Conclusion

Companies that fail to protect their customers’ personal information lose money and reputation. For smaller businesses, those losses can be catastrophic. Fortunately, forward-thinking web hosting providers have developed innovative approaches to helping businesses with their data and privacy concerns. 

Founded in 2006, OrangeWebsite is a recognized industry leader in providing safe and secure web hosting services. Our two-factor authentication service includes a special one-time passcode sent to users through SMS, which users submit to ensure a secure login. The annual fee is just €94.

If you would like to know more about how we can make your website safer and more secure or about our two-factor authentication services, contact us today.