4 ways businesses benefit from passwordless authentication

Before we understand why passwordless authentication is better for businesses, let’s list the essential factors that determine the effectiveness of authentication for businesses:

• Easy access for users

• Authentication security to protect user accounts and business applications

• The costs associated with the overall authentication experience

Decades of studies, experience, and data show that password authentication is lacking in all of these essential aspects of enterprise authentication, and here’s a look at how:

• Uncomfortable: Passwords are incredibly clunky to create, remember and manage all accounts for users. These inconveniences lead to frequent forgotten password cases where users have to reset their password – usually requiring users to take 2 to 4 extra steps to access their account – reducing access for the user in general.

• Security is a big challenge: Password authentication poses security challenges as it is prone to various cyber attacks such as brute force attacks, dictionary attacks, rainbow attacks, credentials, phishing and keylogging. According to a very recent statistic report, in the first half of 2022, nearly 53 million individuals were affected by data vulnerabilities such as data leaks, breaches, and exploitation, primarily due to compromised credentials or unauthorized access.

• Higher soft and hard cost of password authentication: The higher soft and hard costs caused by password reset efforts and lost productivity, combined with the above factors, reduce the return on investment (in authentication) for businesses.

Related: Passwords are terrifyingly insecure. Here are a few safer alternatives.

Passwordless authentication solves all of the above problems for businesses, which is why it has been proven to be a better choice for business environments. As a result, businesses today are gradually shifting to passwordless authentication, ultimately leading to a passwordless future. Now that we’ve discussed why passwordless authentication is better than password authentication, let’s discuss what exactly it is and how it benefits business environments.

Passwordless authentication allows users to log in and access IT resources, systems or applications without passwords. Instead, the user provides another form of authentication such as a biometric, proximity badge, OTP, magic link login, or hardware token code.

Passwordless authentication can increase security and simplify user authentication, as these factors do not need to be remembered and are nearly impossible to copy or steal. Here are the benefits of passwordless authentication for businesses:

Improved cybersecurity approach

Passwordless authentication improves cybersecurity approach for businesses as it can effectively reduce data and identity theft caused by unauthorized access compared to password authentication. Password security risks rely heavily on user password authentication, and passwordless authentication successfully reduces this dependency. The absence of passwords also eliminates the business need for managing password storage and meeting password regulation requirements.

Related: Passwords are slowly becoming a thing of the past

Prevention of password-based attacks

Passwordless authentication uses several authentication techniques that reduce the possibility of falling victim to password-based attacks. The absence of passwords automatically reduces attack vectors and protects against brute force attacks, dictionary attacks, rainbow attacks, credentials, phishing and keylogging.

Business environments are the prime target of password-based attacks to gain access to sensitive and confidential data. Almost 91% of all reported cyber attacks start with phishing scams, making it the most common type of password-based attack.

Lower long-term costs

Passwordless authentication eliminates unwanted password-related costs for businesses. Password-related costs are the amount of money and effort companies spend on storing and managing passwords. This also includes the time IT spends addressing frequently changing legal requirements for password storage and handling password resets.

According to Forrester research, US-based companies set aside more than $1 million annually for password-related support costs. Microsoft collected its cost data before and after passwordless and found that it reduced authentication costs (hard and soft) by 87%. Passwordless authentication increased the cost of authentication attacks for cybercriminals.

Seamless user experience

Users today have different accounts with different companies depending on their needs, and remembering all these passwords has become impractical for them. As a result, they often forget and reset passwords, making it an unpleasant user experience for them.

In contrast, users no longer have to create or remember complicated passwords when using passwordless authentication. Instead, they can use their mobile, email, or biometrics to authenticate, making signups smoother and improving the overall experience.

Related: Cybersecurity Trends and Drivers in 2022

It’s safe to conclude that businesses will eventually benefit from passwordless authentication. However, while adopting passwordless authentication, businesses must take a step-by-step approach and adhere to regulatory standards and compliances. Depending on the business requirements for implementing passwordless authentication, they can choose from in-house development and implementation of passwordless authentication systems or SaaS passwordless authentication solutions available on the market.

Passwordless authentication is becoming increasingly popular with companies that prioritize the security and digital experience of their users and employees. According to an Statista reportThe market revenue for passwordless authentication is expected to reach $25.2 billion by 2025 and steadily increase to approximately $53.6 billion by 2030.

Based on this estimate, it is clear that many companies are becoming aware of the vulnerabilities of passwords and are working towards a passwordless future. While the overall transition to a passwordless future may seem difficult, the benefits and positive effects it brings to businesses are huge.