Passwordless authentication – Why is it more secure?


Passwords, used for authentication, require users to create and memorize complex combinations of letters, numbers, symbols, and cases, to change them frequently, and to avoid reusing them across accounts.

Generally, users must manage between 25 and 85 passwords, and their information sources and tools are expanding exponentially. They are increasingly challenged to sign on to digital tools simply and efficiently, and as a result, they tend to reuse the same passwords repeatedly.

According to the 2019 Verizon Data Breach Investigations Report, 80% of hacking-related breaches used compromised or weak credentials, and 29% of all breaches used stolen credentials, regardless of the attack type. Such attacks contribute to a thriving underground economy, exacerbating the problem. Passwords, one of the oldest security tools in software and the internet, are being replaced as a solution.

What is passwordless authentication?

Passwordless authentication substitutes other identity validation methods for passwords, increasing assurance and convenience. It provides strong assurance of a user’s identity without using passwords, allowing users to authenticate with biometrics, security keys, or a mobile device. It secures access to all enterprise use cases (hybrid, cloud, on-premises, and legacy apps).

This type of authentication has gained popularity due to its significant benefits in improving user login experience and overcoming the inherent vulnerabilities of text-based passwords. These benefits include reduced friction, increased security for each application, and, best of all, the elimination of the legacy password.

To achieve user trust, passwordless authentication provides a single, strong assurance of users’ identities. Passwordless authentication has four significant advantages over traditional knowledge-based authentication. First, it makes financial sense: it increases revenues while decreasing costs. Second, it makes sense from the customer’s standpoint and provides a better user experience. Third, from a strategic standpoint, it can help redefine competition by maximizing the value of interoperability. Fourth, as previously stated, it significantly improves security.

Higher revenues from employee productivity and customer ratings

According to a recent survey, employees worldwide spend 11 hours per year entering or resetting passwords. On average, this represents a $5.2 million direct productivity loss for a company with 15,000 employees. The costs of transitioning to a passwordless ecosystem are expected to be quickly offset by the productivity boost alone.

Password management is greatly simplified by standards such as those developed by the FIDO Alliance, which allow most authentication to be performed on the user side. System administrators and call center operators will have a much better experience communicating with employees and customers, indirectly improving the company’s reputation and customer ratings.

Lower costs in case of a data breach

80% of all data breaches involve weak or stolen passwords used in 29% of attacks. In 2019, the average global data breach cost was $3.92 million, a 1.5% increase over the previous year. When there are no passwords to infer or steal, criminals’ ability to access and exfiltrate data is severely hampered. Password hashes are also useful to criminals because they can brute force them without being limited by the authentication server. From a risk management standpoint, switching to passwordless authentication allows businesses to cut their budgets associated with breach risk exposure by 4/5. This immediately results in lower cyber insurance premiums.

Seamless user experience

The experience will increasingly take precedence over the price. 86% of customers are willing to pay a premium for a better user experience. As a result, if a platform’s authentication experience is poor, some customers will prefer a platform with inferior services but a better authentication experience. It is simple to use passwordless authentication. It mimics how humans have recognized each other for millennia: by looking for identifying belongings or personal characteristics such as uniforms, height, or body shape. Passwordless authentication, in other words, is becoming a competitive differentiator and a critical consideration for digital transformation leaders. It is the gateway to an online service.

Users are less likely to try to circumvent security measures

When users are asked to remember over 100 credentials and passwords, they naturally seek ways to reduce their burden, such as reusing passwords, choosing weak passwords, or writing them down on their phone, email account, or beneath their keyboard. A better user experience means that users are more likely to use the authentication system as intended: reducing the number of rules improves user endorsement, improving security.

The reduced attack surface for businesses

Companies that switch to passwordless solutions significantly reduce their risk of data breaches. In contrast to companies that store their customers’ passwords on their servers, passwordless solutions do not require any personal information to be stored for authentication purposes. Because no personal information is transmitted over the internet when authentication is performed on the user side, man-in-the-middle attacks are virtually impossible.

There is no single collection point for cybercriminals to access a customer biometric dataset because authentication data, such as the user’s biometrics, is kept on the user’s device: this dataset does not exist. As a result, the risk of online fraud and identity theft is significantly reduced. There are also drawbacks: if users misplace their authenticator, for example, if it is linked to a physical device, resetting access can be more difficult than resetting a password.

Implicit multi-factor authentication

Most passwordless authentication relies on a specific device or app – the authenticator, linked to the user, and a biometric feature – two distinct authentication factors that provide far stronger guarantees than a single shared secret. Unlike a one-time password sent via SMS, a passwordless authentication solution is frictionless after a password is entered, fostering multi-factor authentication adoption faster than ever before.