Multi-Factor Authentication: What Is It, Types, How Does It Work, and Benefits

Haseeb Awan
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April 13, 2023


One of the most widely used authentication tools that organizations use is passwords. However, in a world plagued by cyberattacks, you need more than a strong password to secure your personal information from crooks.

Security experts have put great emphasis on the need for a second layer of protection to boost mobile security and for your web accounts, with 2FA or two-factor authentication, often known as multi-factor authentication (MFA). Many companies use authentication management tools to enforce and implement multi-factor authentication across corporate applications to protect business information from being stolen.

At this point, multi-factor authentication has become an increasingly crucial "must-have" security measure to safeguard against account hacks and data breaches. But what is MFA, and should your company use it? Read on to know the answer.

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What Is Multi-Factor Authentication (MFA)?

Multi-factor authentication (MFA) authentication is an account security tool that only legitimate users can access accounts and applications. Multi-factor authentication requires users to verify two or more authentication elements to access online accounts.

Businesses are increasingly using multi-factor authentication methods. Google, Microsoft, Facebook, and Apple use SMS to support multi-factor authentication and push notification features. Companies deploy Multi-factor authentication to ensure mobile security and IoT organizations such as Nest to secure internet of things devices.

A recent study states that by 2023, 60% of large organizations and 80% of small and medium-sized enterprises (SMEs) will incorporate multi-factor authentication tools and methods to secure their business accounts from data breaches and other cyber threats.

How Does Multi-Factor Authentication Work?

The purpose of multi-factor authentication is to create layered protection that makes it difficult for unauthorized persons to breach the system or access a target, such as location, network, or computing devices. If somehow one factor is hacked, that hacker still has more obstacles to overcome before reaching the target.

The MFA systems depend on the two-factor authentication method (2FA) back in the day. Now businesses heavily rely on authentication systems requiring two or more credentials to mitigate the possibility of cyberattacks and mobile security. Multi-factor identification is an integral part of the access control and authentication framework.

So how does multi-factor authentication work exactly?

Users must enter a username (or email associated with the account) and password when logging into the account. The next step is to confirm and verify their identity, usually by phone number, email address, or a security question. Another way to ensure users' identity is by receiving a one-time password (OTP) via SMS or authentication applications like Authy and Google authenticator.

Types of Multi-Factor Authentication

Each additional factor in multi-factor authentication increases your system's security and boost mobile security. The use of multi-form of authentication methods can make hacking difficult for hackers.

There are three categories of multi-factor authentication methods:

  • Something you know or knowledge factor
  • Things you have or the possession factor
  • Something you are or inherence factor

Multi-factor authentication works by combining two or more verification factors from these categories.

Knowledge Factor

Knowledge-based authentication factor generally includes a password, but it can also be a PIN (personal identification number) and an OTP (one-time-password).

Some organizations may also require you to answer personal security questions. Such as:

  • What was your childhood nickname?
  • Name of your first pet?
  • What is the name of your favorite singer?

Possession Factor

The possession authentication factor works several ways, but some standard methods include authentication via mobile app or pop-up notifications from your cellphone. Users must have something to log in, such as a token, SIM card or a badge, OTPs generated by smartphone apps, or sent via text and email.

Possession authentication factor methods use security tokens:

Hardware token

The hardware token is considered one of the safest multi-factor authentications, but it can be more expensive. Hard Security tokens are small hardware devices that store users' data and electronically verify their identity. The device can be a smart card or a built-in chip, such as a USB drive.

Many companies offer hardware tokens to their most influential consumers. Hardware token is the best option to protect banking and investment information. 

Email Codes and Text Tokens

Receiving code via email is one of the most common types of multi-factor authentication. Users receive the verification codes via email to authorize access.

The text tokens are similar to email codes, but the OTP is sent to the phone number associated with the account. Users receive code via smartphone to gain or allow access. After entering your username and password, and (OTP) one-time password is sent to your phone in the form of a pin or out-of-band calls.

Inherence Factor

An inherence authentication factor is usually checked by scanning your fingerprints on the smartphone. But it could also include any biological identifier of a person used for Biometric verification methods:

  • Fingerprints
  • Retina or iris scam 
  • Facial recognition
  • Voice authentication
  • Digital signature scanners

Adaptive Authentication

Adaptive authentication, also known as risk-based authentication, identifies additional factors related to the context and behavior when authenticating and often uses these factors to determine the risk levels connected with the login attempts. Here are the examples:

What is the location of the user when trying to access information?

  • Which device is used to gain access?
  • What network is used to make connections, private or public network?
  • The level of risk is then calculated based on the answers to these questions and decide whether to ask for additional authentication or not.

Location-based Authentication

Location-based multi-factor authentication typically checks users' IP addresses and sometimes their geographic location. This type of authentication blocks the user if their current location is different from the system a user is trying to access.

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Benefits of Multi-Factor Authentication

Businesses are now relying on cloud applications to take advantage of their significant capabilities, be more productive, and work efficiently with virtual teams. It became more crucial during the Covid-19 pandemic, as remote work became vital for business success. As business depends on these accounts, organizations need to secure them. 

One of the significant pitfalls of logging in with traditional usernames and passwords is that the passwords are easy to crack, costing companies millions of dollars. The hacker can quickly access corporate systems in case of a stolen password. In this scenario, MFA or multi-factor authentication is essential to reduce the security risks.

  • Implementing MFA methods can help avoid and mitigate cyberattacks like loss of passwords, phishing attacks, web app attacks, and SIM swap attacks.
  • Since most attacks are related to SIM swaps, cybercriminals steal and share personal information or even sell confidential data for financial gains. Using an MFA method can minimize these from happening.
  • You can rely on Efani's prowess for adequate protection against cybercriminals by adding 11 layers of client-side privacy, integrity, and authentication.
  • Managers can control accounts and ensure users verify their identity by integrating multi-factor or adaptive authentication on all their accounts.
  • MFA is also necessary to enable business mobility, meaning employers can use devices and applications to perform work anywhere. Productivity and business growth amplify when employees can use their preferred device and access all resources without compromising security.

Multi-factor authentication is an easy and effective way to secure accounts or any online asset from cybercriminals. Authentication and access management solutions are the easiest way for companies to implement MFA in all online accounts and configure multi-factor policies.

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Haseeb Awan
CEO, Efani Secure Mobile

I founded Efani after being Sim Swapped 4 times. I am an experienced CEO with a demonstrated history of working in the crypto and cybersecurity industry. I provide Secure Mobile Service for influential people to protect them against SIM Swaps, eavesdropping, location tracking, and other mobile security threats. I've been covered in New York Times, The Wall Street Journal, Mashable, Hulu, Nasdaq, Netflix, Techcrunch, Coindesk, etc. Contact me at 855-55-EFANI or for a confidential assessment to see if we're the right fit!

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