2021 Fintech Security Report: Identity Authentication Risks and Customer Dissatisfaction Top List of Concerns

During the fintech industry conference Money 20/20 USA, authID.ai and independent market research firm Market Measurement conducted a survey of 113 technology and banking decisionmakers to assess attitudes toward legacy and cutting-edge identity authentication solutions. Executives, the survey found, are chiefly concerned about the risks associated with one-time passwords (OTPs) and knowledge-based authentication (KBA) and with the possibility of customers abandoning identity verification transactions altogether due to the friction and hassle implicit in legacy authentication processes. The findings indicate widespread interest in facial biometric authentication as an alternative solution.

More than one-third of respondents indicated they are “highly concerned” about the risks associated with one-time passwords (OTP) and knowledge-based authentication (KBA), such as the seizure of SMS pin codes by cyber criminals or easy-to-guess answers to authentication prompts. This share increases to over three-quarters (80%) when including those “moderately concerned” with those risks.

While one-third of respondents are “highly concerned” about potential customer dissatisfaction with OTP and KBA questions, this figure increases to three quarters (75%) when including those “moderately concerned.” Furthermore, during the next 12 months, 84% of respondents expect that their enterprise will increase their level of investment in IT security, including identity authentication.

Other key findings of the survey include:

  • Currently, identity authentication is most often conducted with one-time passwords (36%) or a combination of OTP and KBA questions (29%).
  • While respondents’ familiarity with facial biometric identity authentication is high (88%), less than one-quarter (22%) currently use this technology.
  • More than two-thirds (70%) of respondents are either “highly likely” or “somewhat likely” to consider facial biometric identity authentication as an alternative to OTP/KBA questions during the next year.

To view the data and methodology behind these findings, download our Fintech Security Survey Summary.