Passwords no longer trusted as a secure method for authentication 

New research from Experian has found that consumers no longer believe passwords are the most secure method for authentication. 

Experian says that the research found that since the pandemic, consumers have an increasing level of comfort and preference for physical and behaviour-based, or invisible methods of security and that. for the first time in four years, passwords did not earn a spot in the top three most secure methods for authenticating a customer’s identity. 

The top three most preferred methods for authentication are:

• Physical biometrics, such as facial recognition and fingerprints
• Pin codes sent to mobile devices
• Behavioral analytics passively observed signals that require no effort from the consumer

Eric Haller, Experian’s EVP and General Manager of Identity, Fraud and DataLabs said  “The top three methods consumers prefer actually give people the added security they desire when accessing their accounts. Consumers want to be recognized digitally without extra steps to identify themselves, and they don’t want to remember yet another password. They are open to more practical solutions in today’s digital era.”

The pandemic caused a surge in digital activity, far greater than expected and many believe this trend is not going away. There has been a 20 percent increase in consumer online transaction activities since the Covid-19 pandemic began. Fraud rates are currently on the rise and consumers are still prioritizing a safe experience, with 55 percent citing security as the most important aspect of their online experience. In addition, 2 out of 3 businesses have increased concern about the overall level of fraud. 

Haller continued “Businesses must be able to properly identify their customers from fraudsters otherwise they are not only risking financial loss but also customer trust, which is critical for today’s digital consumer. There’s an opportunity for companies to modernize their authentication that doesn’t require heavy customer involvement and doesn’t take away from a seamless digital journey,”

Experian surveyed more than 9,000 consumers and more than 2,700 businesses during three waves throughout the pandemic across 10 countries spanning North America, Latin America, Europe and Asia.