The Role of Risk-Based and
Out Of Band Authentication on
Online Payments

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E-commerce and online banking depend on data security and premium authentication systems that have evolved over the years with respect to the increase in sophistication of scams and data breaches. Here, we will discuss two important authentication tools that are effective in mitigating against fraud and how organizations can integrate both systems into their security strategies.

What is Risked-Based authentication (RBA)?

Before the advent of Risk-based authentication tools, organizations and financial institutions prioritized security over the usability of their platform or services. However, as shown by the little or lack of frictionless user experience that often accompany the implementation of these rigid security systems, there is the need for a more adaptive approach that finds a balance between security and premium customer experience.

This is where RBA comes in as it is basically an identity authentication technology that assesses a variety of factors in order to determine the risk level of attempted access to a network or system and thereafter chooses the authentication process that best suits the threat level. Some of the factors considered by RBA to evaluate potential threats include the user’s behaviour as well as the device of the user.

Once any of these factors trigger potential unauthorized access, the system instantaneously consolidates the security level with another layer of authentication that requires biometric elements or other verification processes. However, if the system does not register any threat, the user will only scale the primary security layer for authentication. Hence, it is important to point out that this security tool enables a non-uniform authentication that depends on the threat level and this ultimately improves customers’ experience.

What is Out Of Band (OOB) Authentication?

Out Of Band authentication is a verification process that uses another channel different from the primary channel that enables the communications of two entities that are trying to establish a secured connection. As such, hackers or fraudster will only compromise the authentication process when they have access to both communication channels, which is highly improbable. OOB has become crucial to data security as it offers a secondary authentication process on a different channel inaccessible to malefactors.

For example, users of the desktop version of a bank’s website with OOB authentication could receive one-time passwords via SMS on their smartphones as the second level of verification for the authorization of transactions. In this example, unauthorized access to the user’s account will hit a brick wall since transaction confirmation involves accessing the data on the user’s mobile device.

The Benefit of RBA and OOB Adaptor

We have touched on the definition as well as the benefits of utilizing RBA and the OOB authentication as security tools for online transactions and authenticated connections. Nevertheless, it is possible to combine the authentication functionalities of these technologies and integrate them in order to form a much more comprehensive security system.

RBA and OOB adaptor effectively takes into account the threat level of a transaction and determine whether it is high enough to warrant another level of authentication while enabling a secondary communication channel for identity verification. Apparently, clients can bolster their security system with a more robust process involving a 3D Secure 2 platform for a smoother Risk-Based Authentication. More importantly, the viability of a fully integrated RBA via an Access Control Server is highlighted when we consider the flexibility of the system as either an in-house authentication process or a third-party authentication process.

Bottom Line

Financial institutions are rightly concerned about the explosion of frauds that threaten the integrity of their services. However, as explicitly surmised in this publication, the solution to this threat lies in the implementation of advanced authentication systems. In light of this, the RBA-enabled 3DS2 has emerged as the ultimate platform for frictionless and multi-level secured transactions.