It's no secret that many Canadian banks have been slow to adopt two-factor authentication (2FA). Historically, the government hasn't required this additional security feature. As such, with the lone exception of TD, most of the so-called big five banks hadn't rolled out this option to Canadian customers on a wide-scale basis until recently. Now, driven by demand a desire for more options to protect individuals' most sensitive data, a change may be on the horizon.

For example, CIBC's website includes a notice that users will be required to complete actions necessary for enabling two-step verification, which is essentially 2FA, by the fall.

Implementing a successful 2FA option doesn't happen overnight. The process has to be clearly planned and executed, ideally with a dedicated partner that has experience in the area. Getting 2FA right means providing customers with peace of mind and a reliable method for safeguarding their accounts and assets.

Recap: The 2FA Basics

Let's take a moment to explore the fundamentals of two-factor authentication. We'll discuss what it is and identify the different types of 2FA that are frequently used today. With a basic understanding of how this service works, we can then dive into a more in-depth overview of why Canadian banks may be getting on board.

What Is Two-Factor Authentication?

Let's start with the essentials. Most security protections for online accounts start with a username and password. Basic login credentials, however, are susceptible to security vulnerabilities. For example, if a password is shared with a malicious party because of a phishing attempt, or if this information is exposed in a data breach, you could lose your first layer of protection. This is especially true for individuals who recycle passwords, which is never advisable.

To protect against issues like these, 2FA can be implemented, providing a new layer of security.

As TechRadar explained, 2FA relies on authentication through at least two of the three following categories:

  • Something you know.
  • Something you have.
  • Something you are.

Types Of 2FA

In many instances, your password constitutes "something you know." So most two-factor authentication techniques rely on verifying either something you have or something you are.

"Something you are" could be your face or your fingerprint, two popular biometric identifiers. "Something you have" is most often a device, like your cell phone.

To verify possession of your cell phone, some services use original or third-party authenticator apps.

One of the most common methods of implementing 2FA, however, is through the use of PINs — short, seemingly random numbers, typically only a few digits long — delivered by sending a text using Short Message Service (SMS).

Why Banks Are Embracing 2FA

CIBC notes that customers will have the option to enable 2FA for every sign-on attempt or just when specific actions are taken, like resetting a password or logging on from a new area. So why have banks warmed up to the idea of SMS-enabled 2FA?

Phone Numbers Serve As Unique Identifiers, And SMS Is Ubiquitous

When 2FA is executed using SMS authentication PINs, it allows the entity to verify a key piece of unique information about an individual — their phone number. As with a Canada Revenue Agency (CRA) number, Social Insurance Number (SIN) or, in the U.S., a Social Security number (SSN), these digits are unique in databases and attributable to a specific person.

Plus, practically everybody has access to SMS, whether or not they possess an authenticator app.

SMS Notifications Are a Speedy Way To Help Prevent Fraud

Since SMS authenticator PINs are delivered immediately, they give customers a quick opportunity to respond if they think something suspicious is happening with their account. As long as they have unrestricted access to their own cell phones, users can tell as soon as an unauthorized person tries to access an account.

2FA Is a Helpful Component Of a Strong Security Posture

No security precaution alone is completely immune from exploitation. Savvy criminals can sometimes find ways to circumvent 2FA for targeted attacks. However, two-factor authentication can fill a crucial role as part of a larger security strategy for helping protect customers from fraud. Along with requiring strong passwords and other protections, 2FA can help you bolster your overall security efforts and provide your customers with the support they need.

Learn How To Integrate SMS 2FA Today

If you're ready to begin implementing this cost-effective security feature, we can help. Our experts have worked with a wide variety of clients. Swift SMS Gateway has served more than 200 million authentication PINs for just one of our customers. Reach out to us today to find out how we can assist you as you get up and running. We're ready to help whenever you need us.