Understanding Multi-Factor Authentication: 3 Ways It Can Benefit Your Business

Understanding Multi Factor Authentication (MFA) And Its Benefits | Blog
Most applications require a username and password to be able to login and use the app. This is called “Single Factor Authentication” or “SFA” because it only requires a person to have the username and password in order to sign in.

However, “Multi-Factor Authentication” or “MFA” requires more than just a username or password to unlock.  This adds an additional layer of security compared to usernames and passwords, which can more easily be breached and hacked.

What Are “Authentication Factors”?

At its core, authentication is a process that allows a person to prove they are who they say they are.  When thinking about how to identify your customers, it is integral to know the types of authentication factors available to you. 

Authentication Factors are independent credentials that are used to verify a person’s identity. There are three general categories for authentication factors:

  1. Knowledge Factors

knowledge factor is sometimes referred to as “Something You Know.” These are commonly the things that a user knows and is typical for Single Factor Authentication like Username, Passwords, PIN, and security questions. 

  1. Possession Factors

possession factor consists of “Something You Have”, and is most analogous to a traditional key.

For example, some apps send codes to a smartphone number that you previously said was yours.  When you enter the code sent to your smartphone, this proves you are in possession of the smartphone belonging to you.

Other examples include special cryptographic keys that can stored in a USB stick.  This key is matched with information you previously provided to the app provider.  When you want to prove you are who you say you are, you can use the key stored in the USB stick to prove you have possession of the key.

Similarly, the key could be stored on your smartphone.  In order to prove who you are, the app might ask you to do something on your smartphone.  This proves that you are in possession of the key on your smartphone. 

  1. Inherence Factors

An inherence factor or “Something You Are” is increasingly becoming a popular authentication factor for everyday use.  Examples include fingerprints, facial scans, voice prints, retinal or iris scans, or similar biometric identification systems.

Smartphones often use inherence factors to keep unauthorized users from being able to unlock the smartphone.

Single-Factor Authentication (SFA)

Single-Factor Authentication is the most common security process used by websites or networks for identifying users.

As the name suggests, SFA only uses one factor or credential to authenticate the identity of the user – most commonly a username and corresponding password. 

Due to the massive improvements to the computing and memory power of computers and processors, it has become increasingly easier for hackers to attack and penetrate password databases, or use sheer brute computing power to guess your password. This is evident from the series of data leaks from even the most reputable websites and companies. 

Passwords are no longer enough, and single-factor authentication is rapidly becoming obsolete. The biggest risk for single-factor authentication is that it heavily relies on the diligence of users to take actions to protect their data by creating strong passwords.

Unfortunately, more often than not, most users employ only one easily remembered password for multiple websites. This ensures that if a hacker gets access to one of their accounts, the hacker will have an easier time accessing all other accounts using the same password

For example, a recent study showed that a whopping 83% of Americans still use weak passwords.  Similarly, a statement from Verizon’s Data Breach Investigation report stated that “81% of hacking-related breaches leveraged either stolen and/or weak passwords.” 

It is no secret that websites get hacked and even the biggest companies who employ a team of IT security professionals are not impervious to hacking. When sites get hacked or get their data breached, hackers can make off with important user information like emails, usernames, and even passwords.

Multi-factor authentication helps mitigate these risks because even if hackers have your password, they will still not be able to access your data or account, or otherwise claim to be you.

Multi-Factor Authentication (MFA)

Multi-Factor Authentication uses multiple factors like Knowledge Factors, Possession Factors, and Inherence Factors to verify the identity people. This is significantly more secure compared the single-factor authentication. 

Multi-factor authentication adds another layer of security for businesses and its user. Multi-Factor Authentication, like 2-factor authentication (2FA), uses two authentication factors to verify the identity of the users.

Most 2-factor authenticate uses Knowledge Factors like passwords and usernames together with Possession Factors like codes being sent to the phone of the user that the user will then enter to verify their identity.

Multi-Factor Authentication mitigates the risks of weak passwords and provides an extra layer of security and keeps data much safer. MFA was previously a “nice feature to have” for websites, but now the increased risk posed by stolen and hacked passwords has made MFA a must-have for websites.

Three Significant Benefits of Using Multi-Factor Authentication

  1. Improved Reliability

Multi-Factor Authentication is a cost-effective way for businesses to improve the reliability of their fraud prevention efforts, and add another layer of defense against hacking, impersonation, and ID theft.

  1. Compliance with Regulation and Industry Best Practices

Multi-Factor Authentication helps businesses comply with regulations due to increased security for various customer identification and data-protection requirements. Businesses should look for multi factor authentication apps that allow you to choose between two or even more authentication factors that help add an extra layer of security.

  1. Simplifying the Customer Identification Process

Multi-Factor Authentication helps businesses simplify their customer identification process and helps improve user experience. MFA adds an additional layer of security at the same time, while decreasing the burden for users and customers in terms of verifying that they are who they say they are.


As cyberattacks increase in sophistication, and governments implement more and more regulations to prevent fraud, businesses will find they can no longer afford to avoid using customer verification.

However, it’s important to note that the implementation of MFA must be done with user experience concerns in mind.  Making your customer identification and verification process too strenuous will increase your abandonment rate, and no one will want to buy your products or use your services.