What Is Authentication and Its Role in Preventing Account Takeover

As a digital technology user, you are likely familiar with authentication processes. Almost all digital activities, especially transactions, require authentication. Simply put, when you enter a username and password to log into an account, that is a form of authentication. The same applies when your account requests an OTP code—it is also a form of authentication.

What exactly is authentication, and why is it important for securing accounts, especially against digital fraud like account takeovers? This article will cover everything you need to know about authentication.

What Is Authentication?

In simple terms, authentication is the process of verifying a user’s identity before granting access to a system or specific data. This process ensures that only authorized individuals can access personal information and perform transactions.

According to Microsoft Security, the authentication process involves three key steps:

1. Identification: The user establishes access through a username.
2. Authentication: The user proves their identity by entering a password and OTP or using biometric verification.
3. Authorization: The system verifies that the user has permission to access the requested system.

If authentication in digital transactions is weak, it can lead to various risks, the most dangerous being data breaches that result in financial losses.

Types of Authentication

Here are several types of authentication that are important to understand:

1. Single-Factor Authentication (SFA)

   This is the simplest authentication method, relying on a single credential, such as a password or PIN. Since it has only one security layer, SFA is vulnerable to hacking.

2. Two-Factor Authentication (2FA)

   As the name suggests, two-factor authentication adds an extra layer of security by requiring two forms of verification, such as a password and an OTP code sent to a registered number.

3. Multi-Factor Authentication (MFA)

   This method uses more than two authentication factors, categorized into something you know (password), something you have (device), and something you are (biometrics).

4. Biometric Authentication

   This authentication method uses unique individual characteristics, such as fingerprints or facial recognition, to verify identity. It is difficult to forge and offers a high level of security.

5. OTP Code

   OTP is a unique combination of numbers automatically generated by a security system to authenticate users. It is valid for a single login session or transaction.

6. Continuous Authentication

   This method continuously verifies a user’s identity while they are online or using an account. It monitors biometric data, user behavior, IP address, device location, mobile device sensors, and activity context in real-time. If the system detects unusual patterns, the user will be required to reauthenticate.

Functions of Authentication

In the context of information security, authentication serves not only as an entry gate but also as the first step in protecting sensitive data from external and internal threats. Here are its key functions:

1. Verifying User Identity

   The primary function of authentication is to ensure that the individual attempting to access an account is the rightful user. The system verifies user credentials, such as passwords or OTP codes, against registered data.

2. Protecting Sensitive User Data

   Authentication plays a crucial role in safeguarding personal or corporate data. By ensuring that only authorized users can access information, authentication prevents unauthorized data access.

3. Reducing the Risk of Account Takeover (ATO)

   Account takeover is a form of digital fraud where attackers obtain a victim’s credentials and use them to access accounts. Advanced authentication methods, such as Multi-Factor Authentication (MFA) or biometric authentication, can minimize ATO risks. With MFA, even if a user's password is leaked, attackers cannot access the account without additional authentication.

4. Enhancing Security in Digital Transactions

   In online transactions, authentication ensures that only authorized users can complete transactions. If suspicious activities occur, the authentication system detects and prevents them before any damage is done.

5. Ensuring Regulatory Compliance

   Many industries are required by law to implement authentication as part of their security policies. Authentication helps organizations comply with these standards and avoid legal penalties.

How Authentication Prevents Account Takeover

Account takeover (ATO) occurs when unauthorized parties gain access to a user's account. Attackers use various techniques, including phishing, credential stuffing, and malware. Once they have access, they can misuse sensitive data, conduct unauthorized transactions, and steal money.

Authentication ensures that only legitimate users can access their accounts. Here’s how:

1. Device-Based Authentication

   This system links a user’s identity to their device. When a user registers for the first time, the system automatically verifies the device being used. With this method, even if a password or PIN is compromised, the account cannot be accessed from an unverified device.

2. Facial Authentication (Biometric Authentication)

   Facial authentication verifies a user's identity based on their registered facial data. This method employs several technologies, including:

   • Liveness Detection: Detects the difference between real biometric data and fake data generated using deepfake technology. This prevents biometric forgery.
   • Real-Time Face Matching: Ensures that authentication is performed by the person whose biometric data is registered.
   • Device-Based Security: Links biometric data to a user’s device, ensuring that only verified biometric data and devices can grant access.

VIDA offers authentication solutions that combine device-based and biometric authentication, providing an extra layer of security to protect user accounts from account takeover. Despite involving two authentication layers, the process is quick and takes only seconds. Users simply perform biometric authentication, such as a selfie, while the system automatically verifies their identity and device.

Learn more in VIDA’s latest whitepaper, which focuses on the importance of device and biometric authentication for personal data security.

Authentication is a crucial solution in safeguarding data and preventing account takeovers. By understanding various authentication methods and their functions, individuals and businesses can protect their accounts from unauthorized access.