The Security Benefits of SMS Authentication in Banking

In today’s digital world, creating as many layers of protection as possible is crucial. SMS authentication is a commonly used and effective way to add an additional layer of protection. Two factor SMS authentication is becoming more common amongst social media accounts, mobile apps, streaming accounts as well as financial services apps and websites. This article will explain the benefits of SMS authentication for banks and why it is a great choice to protect customers.

What is SMS Two Factor Authentication?

SMS 2 factor authentication (2FA) is a form of digital authentication often used to provide an additional level of protection in addition to the standard password and login protection. SMS 2FA involves a short one-time password being sent to the user via text message which is required to log-in and gain access to their account.

SMS two factor authentication doesn’t require your phone to have access to the internet, which gives SMS based 2FA an edge over other authentication methods which require the user to be online to be completed.

Benefits of SMS 2 Factor Authentication

Works Offline – User does not have to have internet access

Fast Results – Most messages are delivered and read within minutes

No Smartphone needed – Most adults in the US own a cell phone with texting

User Friendly – Requires no additional software or hardware

Enhanced Security:

SMS authentication provides an additional layer of security for bank customers to the traditional username and password authentication. By using SMS authentication, banks can ensure that only authorized users are accessing their accounts. This strategy of SMS two-factor authentication helps fight against customer’s sensitive information and accounts being compromised.

Mitigating Fraudulent Activities:

Protecting your customers is crucial for any business. When it comes to banking and other financial institutions, protection becomes one of the most important priorites. SMS authentication helps banks mitigate some of the worst types of fraudulent activities.

Phising attacks are one of the most common types of attacks that banks face today. Phishing involves tricking customers into revealing their sensitive information, such as passwords, user names, social security numbers etc. through either emails or other online communication. SMS 2 factor authentication helps to defend from these phishing attacks. With SMS 2FA, even if a scammer manages to obtain the sensitive information above, they will not be able to gain access to the victim’s account. When a customer receives a 2FA text message, but did not attempt to log in, this is instantly a red flag notifying the customer that they may be a target of a phishing attack.

By implementing SMS authentication, banks can help prevent fraudulent activities and protect their customers’ accounts and personal information. This not only benefits the bank but also benefits the customer, and enhances the trust and confidence in the bank and their security.

Cost-Effective:

SMS authentication is a cost-effective way to implement two-factor authentication. Compared to other authentication methods such as hardware tokens or biometric authentication, SMS authentication is a much cheaper alternative. With the low cost of SMS marketing services, SMS authentication is a quality investment for banks to protect their customers and their accounts, while maintaining compliance.

Improved Customer Experience:

Banks like any other business are always looking for ways to improver their customer service. SMS authentication is a simple, easy and user-friendly way to authenticate a user’s identity. The process is simple, the user receives a text message with a unique code that they enter to gain access to their account. The simple nature of SMS 2FA helps to minimize frustration many customer’s already face with technical issues, forgetting passwords, and being asked to download seperate authenticator applications. By providing an easy and seamless authentication experience, banks can improve their customers’ satisfaction and loyalty.

This improvement in experience for user’s can lead to a better relationship with bank customers, leading to more revenue generation for the banks who provide SMS 2 factor authentication.

Compliance Requirements:

Many regulatory bodies such as the Payment Card Industry Data Security Standard (PCI DSS) require banks to implement two-factor authentication to comply with security standards.

SMS authentication is a commonly used and an acceptable form of two-factor authentication under these regulations. Implementing SMS authentication can help banks comply with these regulations and avoid potential fines or penalties.

The Bottom Line

In conclusion, SMS authentication is an effective way to provide several security benefits for banks of all sizes. It enhances security by providing a second layer of  protection in the form of authentication, improves customer experience, is cost-effective, assists banks comply with regulations, as well as mitigates fraudulent activities. By implementing SMS authentication, banks are able to provide a secure and seamless banking experience for their customers while protecting their accounts and their personal information. If you are ready to begin implementing SMS authentication, click the link below and sign up today!