Our world is increasingly digitized. That means safeguarding digital assets like your financial records, personal data, intellectual property, and digital platforms is essential. Failure to protect these assets can lead to serious consequences, including financial loss, identity theft, and reputational damage.
That’s where two-factor authentication comes into play. Let’s look at how this security method can help you keep your personal information out of the wrong hands.
Two-factor authentication (2FA) — or the more advanced multifactor authentication — is a security process that allows you to monitor and help safeguard your most vulnerable information, like financial and personal details, that others could use against you. This process requires additional security measures to verify your identity. Typically, it involves both “something you know,” like a password, and “something you have,” like a phone, or hardware token. Multifactor authentication adds another factor, often “something you are”, like a fingerprint or facial recognition.
When you log in, you must first enter your username and password. Then, a secondary verification is required, such as entering a one-time code sent via SMS, email, or an authentication app. This added step helps prevent unauthorized access, even if someone has obtained your password.
Why is this important? For many reasons. Namely, simply using a password is often not enough to keep unauthorized people away from your information. This makes your bank account and other personal details more vulnerable to a cyber-attack. In fact, 30% of users have experienced security breaches due to weak passwords. Additionally, Good Firms also found that 62.9% of people only change their passwords when prompted, making it easier for hackers to gain access and steal information.
While this process is straightforward, it’s important to know what types of information are necessary to make your personal information as secure as possible. Here are the main components of two-factor authentication:
While you’ve probably experienced one type of two-factor authentication, there are several other methods you may use at some point:
One of the oldest forms of two-factor authentication, this method is often used in businesses who employ many individuals. Companies can give their team members hardware tokens in the form of a key fob or scannable card that produces codes every few seconds to a minute. They use encryption algorithms, one-time passwords, or a secure PIN that these professionals can use to access sensitive data.
One of the most popular types of authentications is SMS — or text messaging — which can be used when a message is sent to a trusted phone number. When using this method, you’ll be prompted to either receive a call or text message with a one-time code that you can type into the app or system you’re hoping to activate.
With push notifications, you don’t have to type in a password. Instead, this type of authentication sends a signal to your device to either approve or deny you access to a website or app. Rather than receiving a text message or call with a code, a push notification pops up on your phone so you can confirm your login attempt.
Similar to push notifications, you don’t have to use a password for voice-based authentication. This works by allowing your identity to be confirmed through automation, with a voice asking you to press a key or state your name to identify yourself. Some solutions use a decentralized model that ensures your voice template is secured on your mobile device. Others are designed to hold your voice in a centralized library where voice templates are held and matched at the service provider.
There are apps like Google Authenticator or Microsoft Authenticator that provide a time-sensitive verification step beyond just your password. These codes are time-based — usually every 30 seconds — which allows them to only be used within a short period.
While not everyone has their location turned on for certain apps, this type of authentication method works behind the scenes, alerting you if your current position doesn’t align with the service you’re expecting. In this scenario, you would most likely be asked to confirm an additional verification method.
There were 2,365 reported cyberattacks in 2023, with a total of 343,338,964 victims, according to the ITRC Annual Data Breach Report, and that number isn’t expected to go down this year. While not all of these cyberattacks could have been stopped with two-factor authentication, any extra layers of protection you can add to your accounts are beneficial.
Here are just a few of the advantages of using two-factor authentication for improved security:
Your financial information like banking details, credit card information, and investment accounts can be gold mines for hackers if not kept under lock and key. Cybercriminals can exploit weak security to gain access to sensitive financial information, leading to unauthorized transactions and potential financial losses.
Oftentimes, scammers can buy credentials stolen in data breaches, using your username and password to log in and access your finances. They might also try to use those login credentials to get into another one of your accounts, which is why it’s critical to use unique, strong passwords for each of your accounts.
Digital assets include intellectual property such as trade secrets, patents, and brand assets. Protecting these assets is essential to maintain a competitive advantage and prevent misuse or theft of proprietary information. If you store any type of intellectual property on your devices without having a two-factor authentication login process to protect it, it could be accessed by cybercriminals looking to steal and exploit it.
The risk of extreme losses from cyber incidents is increasing, nearly quadrupling from 2017 to 2024, with a total of $2.5 billion, per the International Monetary Fund’s Global Financial Stability Account. With the rise of these sophisticated cyberattacks and identity theft, digital asset protection is more vital than ever.
By using advanced authentication methods like a verification code or a login code sent to a trusted device, you mitigate risk and ensure secure access to your sensitive information, keeping it out of the wrong hands.
It’s vital to have two-factor authentication for your accounts, especially your bank account. However, it’s also important to be aware of signs of fishy behavior. With hackers constantly using the latest technological developments to make their attacks more sophisticated, it pays to be as cautious and conscious of your surroundings as possible.
In the spirit of protecting yourself, here are some red flags to watch out for:
When deciding where to store your money, you need a financial institution you can trust. At Cathay Bank, we’ll secure your finances as if they were our own, giving only you access to your money when and where you need it — and keeping it secure from unauthorized access.
We know how vital education and awareness are when it comes to keeping your financial future safe from harm. That’s why we created our Security Information Center, providing you with best practices and tips to protect your personal financial information.
Open a secure account today to start saving with confidence.
This article does not constitute legal, accounting or other professional advice. Although the information contained herein is intended to be accurate, Cathay Bank does not assume liability for loss or damage due to reliance on such information.
