All about user authentication 

Not everyone should have consistent access to all digital systems. Today’s systems all focus on access control—from e-Commerce websites to online banking, healthcare, social media, and beyond. At the heart of controlling access is the user authentication process that seeks to verify whether a user requesting system access is authorized. We authenticate ourselves online regularly, sometimes even every day, through ubiquitous methods such as usernames and passwords. 

In an era of widespread identity theft, ransomware attacks and massive data breaches, the role of authentication in cybersecurity has never been more important. With so much of our lives now online, large amounts of sensitive and personal data exist in business systems worldwide. Simple passwords are no longer sufficient; organizations have changed requirements and now demand more complex, longer passwords. Automatic expiration to encourage password rotation is also on the rise. 

Malicious actors continue to find new and troublesome ways to compromise accounts and steal information. Subsequently, considerable effort has been made to develop and deploy more resilient user authentication methods. A combination of traditional and modern approaches is now a popular choice among organizations, but what’s the best approach? What counters the increase in threats, and what can companies do about it? 

This article explores the different methods available for user authentication and considers the pros and cons of each. We’ll compare and contrast approaches, examine the important role that phones play in today’s systems and consider some important tips for implementation. We’ll also discuss the trends that may reshape this space in the near future, such as the potential impacts of AI. 

Table of Contents

• What is user authentication? 
• User authentication methods and techniques 
• Which approaches to authentication are most secure? 
• The role of phones and identity verification APIs 
• Ways to implement authentication 
• Modern digital identity verification solutions 
• Trends in authentication  
• Best practices for identity access management 
• Enhance organizational security  

What is user authentication? 

What does user authentication do? It confirms that a user is the true owner of a digital account. In many approaches to authentication (but not all), the key lies in the confirmation that a user has presented unique or secret information that matches the information a system expects.  

In the most basic example of a username and password, a business compares what a user provides to a secure record maintained by the company. A match authenticates the user. More advanced, modern systems use many other factors to authenticate individuals. Without a strong approach to authentication, system security remains weak and potentially sensitive data becomes vulnerable to misuse by threat actors.  

Note that authentication differs from authorization. The latter concerns which specific system resources an authenticated user may access. Authentication occurs before authorization and plays a central role in the restriction of permissions in a system.  

For example, an average e-Commerce shopper may need to authenticate their access to an account with stored payment and shipment details. The system authorizes them only to add items to a cart or purchase those items. When the e-Commerce website administrator logs in and undergoes authentication, the system may authorize that person to take protected actions, such as price or product changes. However, successful authentication must occur first. 

User authentication methods and techniques 

Since the creation of the first modern computer systems in the 1960s, there has been a need to secure and control access. There are many ways to authenticate users, from the basic authentication methods used decades ago to the increasingly complex and data-driven strategies of today. Some user verification methods add convenience, while others offer stronger security.  

Efforts continue to strike the ideal balance between user experience and safety. Let’s explore the categories and methods used for authentication and discuss the pros and cons of each option. 

Knowledge-based authentication (KBA) 

This category of authentication comprises several methods, all based on information a specific user knows. Most often, that means a username and password. It could also be a digit-based PIN the user creates and memorizes, similar to real-world card transactions. Security questions, such as “What was the name of your first pet?” also count as KBA. 

Possession-based authentication 

This authentication category focuses on something a user owns or possesses rather than something they know. Common examples include one-time passwords sent to a mobile device by SMS or push notification. Hardware tokens like USB keys and NFC-enabled smart cards are also popular. Alternatively, users may possess software tokens from an app-based authenticator on their device. These apps, registered with websites and services, continuously generate short-term codes that only the device owner can access and enter for authentication. 

Location-based authentication 

This approach to authentication, often used at an organizational level, validates users based on their location. This can be their geographic position or the specific network from which the authentication request originated.  

For example, consider a university student who wants to access educational resources that are only free and available on campus. When the user attempts to access the system, IP address analysis indicates the machine is on the appropriate network and grants access. This process can also work in the opposite direction through “geofencing,” or access restriction based on a user’s location. 

Adaptive authentication 

Artificial intelligence can augment the advanced approach of adaptive authentication and provide a “context-aware” means of evaluating user access. This approach considers multiple factors based on the circumstances of an authentication request. In some cases, this process might require additional factors. At other times, it may provide a more convenient user experience when the system detects recognized patterns. An adaptive authentication process may examine: 

By combining different approaches, these systems can more effectively detect anomalous behavior virtually in real time. When fraud signals appear, such an approach can shut down illegitimate access quickly. 

Password-based authentication 

Password authentication requires an individual to log in to services with a username and a password that the user creates and manages themselves. The business website or app uses an algorithm to compare the provided password with an encrypted database entry for a match. When the passwords match, the system authenticates the user. Many applications, such as personal email accounts, social media platforms, and many e-Commerce websites, apply this widespread method. 

Multifactor authentication (MFA) 

Multifactor authentication is a sign-on method that requires more than one element to authenticate a user. The most common example is the combination of a user’s password and a separate one-time password that expires after use. MFA provides an additional layer of security. Even if a bad actor compromises a password, they may be unable to answer the MFA challenge, so the account remains secure.  

Some examples of MFA options include codes delivered by SMS to a user’s mobile device. A service may also email a code to the user or provide a code via automated voice call. Third-party authenticator apps that generate unique codes on demand are also popular. Other types of authentication, discussed below, can also serve as factors used for MFA. 

Biometric authentication 

Biometrics refers to using personal physical characteristics to authenticate a user. After an initial scan of the individual’s features, algorithms convert that data into a template for future comparisons. Advanced software analyzes and compares new scans to the original scan. A sufficiently similar match confirms that the user is the original account creator. These calculations usually occur in a highly secure environment, such as on a user’s device. The device may confirm the match with a third-party service to protect the biometric data. 

Common biometric authentication methods include fingerprint scanning, iris scanning, and facial recognition techniques. Biometrics offer excellent security because this authentication factor ties directly to an individual’s unique features. However, securing biometric data management is a challenge—not every user may be willing or able to engage with this method. 

Token authentication 

In some higher-security applications, companies may use token-based authentication that requires physical devices. These devices may contain unique information or an internal mechanism of one-time code generation. Users must insert their hardware token into the computer to complete the authentication process. Today’s most common hardware tokens are special USB keys and smart cards that are inserted into dedicated readers. Key fobs that generate codes for users to enter are also used. 

The need for a physically present device adds a personal and user-controlled factor. These solutions often find use in corporate or government settings where strict control of computer systems is critical. In conjunction with other MFA elements, they can provide a very strong security framework for authentication. 

Single sign-on (SSO) 

SSO (single sign-on) is an application of federated identity management, or FIM. FIM refers to the continuity of a user’s identity across multiple disparate identity systems. SSO, in turn, refers to the use of a single set of login credentials to access multiple applications without the need for a unique password for every app. There are several ways to implement SSO for authentication, such as using the Security Assertion Markup Language (SAML). SAML provides the framework to communicate a user’s authentication credentials securely across multiple locations. 

Other solutions include OpenID Connect, an evolution of the OAuth framework. These solutions are popular in applications such as social media, where an individual may use their social platform account to access other services without creating a new account. 

Certificate-based authentication 

Certificate authentication is an application of public key infrastructure (PKI). Digital certificates reside locally on a user’s device and contain a public key paired with a user’s private key. The certificate contains additional information about the user’s identity and device details. A third-party certificate authority provides users with a digital signature on the certificate backed by the authority’s own private key. When a user wishes to authenticate, the certificate authority (CA) communicates with the business system in an exchange of certificates that securely validate a key match. 

For enterprise environments, certificates can provide a flexible means of keeping user accounts and devices secure. Certificates can act as an additional factor in sign-ins, or they can replace passwords for access to certain resources (such as internal business systems).  

Comparing authentication methods

Method	Level of security	Cost	User experience	Implementation
Passwords	Weak	Low	Moderate	Very easy
Multifactor authentication	Strong	Moderate	Moderate to excellent	Moderately easy
Biometrics	Strong	Moderate to High	Excellent	Challenging
Token-based authentication	Strong	High	Poor to moderate	Moderately difficult
Single sign-on	Moderate	Low to moderate	Excellent	Moderately easy
Certificate-based	Strong	High	Excellent	Moderately difficult
‍Knowledge-based	Weak to Moderate	Low	Moderate	Very easy
‍Possession-based	Strong	High	Moderate	Moderately difficult
‍Location-based	Moderate	Moderate	Excellent	Moderately difficult
‍Adaptive	Strong	High	Excellent	Challenging

Which approaches to authentication are most secure? 

What is the most secure approach to user authentication? If we base the answer solely on the level of security a method offers, we might rank passwords near the bottom. At the top would be factors that are within the direct control of a user and difficult to spoof. Those methods include biometric authentication, such as fingerprint or facial recognition. Hardware tokens for physically-supported authentication are also well-secured. 

However, there are trade-offs at the highest level of security. No method can provide a 100% guarantee, and more secure solutions might not always be feasible. For example, not everyone has access to devices that can perform biometric authentication. Hardware keys are highly secure, but can be inconvenient and still prone to loss or physical theft. 

Not every situation demands the most hardened and secure authentication methods. It’s important for organizations to factor in the element of user experience. Passwords have remained popular for so long for a reason: they are familiar and simple to use. The demand for a hardware key or complex multi-step authentication can be overkill in some situations, especially in consumer-facing experiences. 

While traditional authentication relies considerably on knowledge-based techniques like passwords, modern authentication blends possession, location, and other factors into the process. There are ways to build smooth, almost seamless experiences for users today that leverage the enhanced security of MFA.  

Safe user authentication no longer has to be an either/or proposition between ease of use and strength of security. One specific element of modern society makes that more possible: the widespread availability and use of personal mobile devices. Phones are at the heart of many authentication processes today. Let’s take a closer look at how and why. 

The role of phones and identity verification APIs 

Solutions that deliver versatile but straightforward outcomes are essential, with a need for fast, secure and reliable user authentication among businesses. Nowadays, advanced APIs for phone-based identity verification are driving transformation across industries. Widespread user adoption worldwide speaks to the ease of use and the dependable security this approach provides. 

How does phone verification work? 

The phone verification process is straightforward from the user’s perspective. The instant a user tries to access a restricted resource, for instance, such as logging in to an account, the system generates a unique and secure one-time password (OTP) to send to the user’s registered phone number. This password may also be time-limited and expire a few minutes after issuance. The user receives the OTP by SMS or voice call, though it’s possible to leverage other channels (such as WhatsApp) as well. 

With a one-time password, the user inputs that password into the website or mobile app account they are trying to access. Behind the scenes, a system compares the user input to the logged record of the OTP issued to the user. A match authenticates the user. 

Today, API-based solutions make integration into business systems seamless. A platform such as the Telesign Verify API can support the entire process. It can handle user requests for authentication, communicate to issue the OTP, and then parse the user’s response input to validate that OTP for access. The process takes only seconds and adds fast, reliable security to any system requiring controlled access. 

Going beyond phone numbers 

Verification APIs power SMS and voice-based OTP delivery but can also provide enhanced security in other ways. APIs can enable deeper, more detailed authentication that adds extra certainty about the individual’s identity, with digital identity verification being a core area of focus, especially in regulated industries. Some of the other authentication methods an API can automate include: 

With a robust API that facilitates smooth communications between user devices and government or business databases, organizations can deploy additional layers of security. 

The benefits of phone-based identity verification 

Ease of use and reliable user adoption are two core advantages of phone-based user authentication. Virtually everyone is familiar with SMS messages, and many have already used OTPs in other contexts. In turn, this familiarity makes it simpler for a business to adopt MFA and encourage users to enable it for their own accounts. There are other benefits that businesses should also know about. These include: 

Let’s now examine how these benefits translate into positive outcomes across real industries. 

Real-world applications for this technology 

There are many industries in which phone-based authentication is a well-established technology. One can even find SMS-based OTPs available as an option on accounts tied to lower-security services. However, many industries use this technology to fight back against the very real costs of fraud and account takeovers. Let’s look closely at a few. 

E-Commerce 

Online shops have a vested interest in preventing fraudulent transactions. Fraud not only costs the business money but can negatively impact a brand’s reputation, whether with the public or with vendors. Phone-based authentication provides a low-friction opportunity to verify user identities without significant interruptions to the login or checkout process. The use of OTPs makes the shopping experience safer and signals to users a proactive commitment to protecting their purchase data. 

Through phone-based authentication, it’s possible for e-Commerce shops to verify valuable transactions and keep credit card information secure by detecting unusual activity. An authentication challenge verifies the user’s intent. The same process can stop suspicious account changes that could lead to takeovers. When nearly one-third of all e-Commerce logins are takeover attempts, extra security is essential. 

Financial services 

In fintech, from banks to investment management firms, phone authentication also plays a crucial role. It powers secure onboarding procedures that let new users set up their accounts quickly while ensuring the organization can still conduct due diligence, such as KYC or AML procedures. When a user wants to execute a transaction, such as a wire transfer or a stock purchase, verification provides another layer of certainty that the action was authorized by the real account holder. 

Nearly a third of consumers report that they’ve experienced fraud at least once over the last three years, so a system that protects customer data is a must-have. Carrier subscriber data offers essential insights and a means of mitigating the risk of fraud related to OTPs. A system that leverages this data as a potential fraud signal can make financial services more resilient and flexible. 

Phone authentication can also help financial services control costs related to KYC compliance by identifying fake accounts earlier in the process. Without early detection, an organization may spend unnecessarily on documents and biometric verification that could’ve been avoided with enhanced security at onboarding.  

Social media 

Even on social media, we find valuable use cases for authentication through mobile channels. These platforms are no longer just a place to connect; for many, they are also the engine for content creation that generates real revenue. Authentication helps protect such users while also offering protection to the platform itself by reducing spam. Platforms can also fight back against fake profiles, a common problem, by enforcing regular authentication requirements. 

Social media platforms can attract many kinds of bad actors, such as those who deploy bot accounts to spread spam or fraudulently inflate traffic to other accounts. Phone-based authentication does more than help flag fake accounts through subscriber data. Intelligent analysis of multiple signals from mobile channels can help platforms detect SIM swaps and apply other techniques to cut off bot access, all while MFA enables more secure accounts. 

How should businesses across different industries approach the implementation process? We’ll examine that now. 

Ways to implement authentication

The implementation of user authentication is a process every business ought to consider carefully. There are many strategies available today. Businesses must select one that aligns with security needs and meets user expectations. 

Using traditional password techniques 

Some businesses continue to rely only on password-based authentication and keep other factors strictly optional. They may strengthen their password system by requiring complex passwords with blended character types. Mandating password replacement every few months may also be a part of such a strategy. However, as we’ve seen, passwords remain an insecure method on their own, and they are vulnerable to theft, phishing, and other problems. 

Multifactor authentication is the preferred implementation strategy today due to those problems. While passwords provide a simple and familiar user experience, it’s possible to strengthen one’s security footing without making UX compromises. The adoption of SMS-based authentication makes that possible, but it does raise some questions of its own. 

For example, how can you ensure that you send SMS OTPs efficiently and effectively without wasted fees and undelivered messages? That’s one implementation challenge many businesses face. As part of one’s strategic approach, consider the value of a service such as Telesign Phone ID. 

With Phone ID, you can check phone number validity and cleanse international numbers for clarity and accuracy. This API can clarify what type of phone number a user provides, which in turn helps eliminate messages sent to undeliverable destinations, such as a landline or VoIP number. Phone ID also helps fight fraud by simplifying the detection of potentially fake data, such as a spoofed number.  

Push notification authentication by Telesign 

For businesses that experience a high level of user engagement with mobile apps, there is another strategy to consider. While SMS-based OTPs are a gold standard, they do have drawbacks that make them vulnerable to some types of attacks. Telesign’s Push Verify offers a way to solve this problem. By using app-generated push notifications as part of the authentication process, you can provide an even more seamless, native experience for users. 

With this service, protected actions (such as account changes) trigger a simple push notification that appears directly on the user’s device screen. With one tap, the user can authorize or decline the action. These versatile, innovative strategies for authentication implementation can keep businesses ahead of the curve. 

Modern digital identity verification solutions 

While user authentication and digital identity verification might seem like two terms for the same process, they are in fact separate from one another. Recall that user authentication is about the determination that a user may access a system or digital resource. Identity verification focuses instead on a more thorough, complete confirmation that a person is who they claim to be. Identity verification usually takes place early, such as during onboarding, and may involve document scans or biometric data. 

Identity verification isn’t always complex, and it can intersect with the same workflows a business uses for authentication purposes. Confirming that a phone number is valid and using SMS for verification, for example, serves similar purposes here. A cybersecurity-focused solution that delivers a robust approach in this space provides your business with a shield against data breaches. Identity verification and user authentication working together can work to prevent fraudulent account sign-ups and stop bad actors from accessing systems without authorization.  

SMS Verify: API-driven verification for today’s digital environment 

A solution that integrates the core elements of this process together is essential. With Telesign’s SMS Verify, businesses can leverage a robust API-powered verification process enhanced with phone number lookup capabilities and more. This API uses intelligent message routing to ensure speedy delivery, which makes modern SMS verification versatile and easy to use.  

Automated failovers to additional channels and carriers further enhance deliverability. A combined solution like this supports identity verification and authentication while combating suspicious traffic, potential SIM swaps, and more. 

Trends in authentication  

Research and development efforts continue to improve the security of today’s authentication strategies and to develop the tools of tomorrow. Currently, there are several categories of innovation poised to have a big impact on the way users authenticate. Some of these solutions are already available and may soon become more widespread, while others continue to mature. What are these trends? 

Passwordless authentication solutions 

There is extensive interest in a shift away from passwords as a means of authentication. Passwordless solutions, including “passkey” technology, continue to gain traction. Major brands, from Google and Microsoft to big-name password managers, have announced efforts to roll out passwordless sign-on options for users. Let’s look at a few examples of this new framework. 

FIDO2 is the framework now established as a viable option in the passwordless space. FIDO2 stands for “Fast Identity Online 2” and comprises a broad, open standard, of which passkey frameworks are a part. Passkeys use public key cryptography to bypass the need for user-defined passwords. In brief, when users register in a FIDO2 system, it automatically creates a private key tied directly to the device. This occurs only after the user authenticates using another method, such as via biometric data or a private PIN. 

The service where the user registers receives an encrypted version of the user’s public key. At sign-on, the user relies on their device to complete a passkey challenge and confirm that the key pair matches. Once set up, the sign-on process is rapid, secure and protected against common threats such as phishing, as there are few ways for a threat actor to obtain the keys without device access. 

Services such as Microsoft’s Windows Hello are FIDO2-compliant solutions for passwordless access control. With Windows Hello, credentials for sign-on remain tied directly to a user’s device. The presentation of an additional factor, such as a fingerprint, facial recognition, or a PIN, validates the user’s access. As efforts to enhance security industry-wide continue, passwordless solutions such as these are expected to expand. 

The impact of AI 

The impacts of artificial intelligence (AI) may soon be felt more prominently in the authentication space. As machine learning continues to grow more advanced and AI solutions integrate more data, advanced authentication models may enter the marketplace in greater numbers. AI will play a role in the refinement of behavioral biometrics. These elements include the way that a user types on their device, the patterns associated with website navigation and even how a user scrolls. Smart devices with built-in sensors could even identify users by the patterns defined by how they handle their devices. 

An AI model trained to recognize user-specific traits such as these could play a role in the detection of anomalous behaviors. If the patterns it analyzes don’t align with a user’s historical behaviors, the model might prevent a user from certain actions or request additional verification. As adaptive authentication systems spread throughout the business world, AI will fundamentally alter their reach and effectiveness. 

The growth of decentralized identities 

Passkeys aren’t the only authentication approach that uses public/private key cryptography. While passkeys tie keys directly to a user’s device, decentralized authentication registers one key pair in an immutable blockchain ledger. This removes the need for any kind of centralized storage, such as a business computer system that stores the encrypted public keys of its users.  

Instead, user devices requesting authentication and businesses seeking to authenticate them would both reference this decentralized ledger. Since no one else can alter what’s on the blockchain record, a key match is more reliable proof of a user’s identity. There’s also no need to connect to the original issuer of the credentials. As an added bonus, blockchain solutions give users enhanced control over their information and who they share it with.  

Best practices for identity access management 

How well does your organization handle this process? A closer look at the framework you currently have in place for user authentication could reveal opportunities to improve security and UX. Taking a strategic look at different elements of the process is important. Some of the best practices and steps you may wish to consider include the following. 

An organization’s approach to identity access management should be fluid. Consider the level of change in this space from 20 or even 10 years ago. As technology and the threat landscape evolve, so does the need for stronger, more reliable security practices. With that in mind, routine security audits should be a part of every company’s plan. These audits should focus on assessments of your system’s effectiveness, user experience, speed, and reliability.  

Stay up to date with updates, including the software you use to the processes it enables. The fight against fraud is ongoing, and organizations should be ready to adopt new or enhanced technologies as their needs require. 

Enhance organizational security  

Data breaches increase the risk of identity theft and unauthorized account access. Businesses can suffer millions of dollars in losses. In some regions, improperly handling user data and any subsequent breaches could even invite regulatory scrutiny and other consequences. Organizations should therefore do as much as possible to safeguard digital systems, prevent unauthorized access and shut down the possibility of data breaches. A robust, modern approach to user authentication is a compelling step toward mitigating such risks. 

Businesses have more ways to secure their systems than ever before with today’s phone-based solutions and the trend towards AI and ML-enhanced authentication strategies. Moreover, the wide range of available solutions provides a means to build a system tailored to specific needs, industry-relevant use cases and more. When the costs of a breach can be so enormous, an investment in intelligent, reliable authentication can prove very valuable indeed. 

As the threat environment evolves and bad actors continue to grow more sophisticated, now is an excellent time to evaluate your existing approach to authentication. Consider how well your current system works, not just in terms of the security it provides but also the end-user experience. Enhance your approach with Telesign solutions, all while keeping users engaged with a seamless authentication process—talk to our experts today.