Article

From OTPs to Passkeys: Navigating the Customer Authentication Landscape

02/13/24
Jennie Berry
Jennie Berry
President
Stacy Schulman
Stacy Schulman
SVP of Marketing
Customer-Authentication-Landscape-Liminal-Article

In today’s digital age, navigating the customer authentication landscape is paramount for ensuring data security. With the increasing need to protect sensitive data against cyber threats, organizations across various sectors are seeking more robust, user-friendly authentication solutions. The market for customer authentication has been evolving rapidly, with technological innovations reshaping traditional security measures.

Despite the availability of advanced authentication technologies, such as FIDO2 passkeys and biometric systems, many organizations are hesitant to transition from traditional multi-factor authentication (MFA) methods. Concerns about the opportunity cost of change, the complexity of new technologies, and educational barriers for stakeholders are some of the key challenges faced. Additionally, integrating authorization features into authentication solutions has become a critical requirement, yet many are unsure how to implement these advancements effectively.

In light of these complexities and challenges, the critical questions for business leaders in the market for authentication solutions include: How can my company effectively navigate these changes in customer authentication methods? What strategies can be adopted to balance the need for robust security and a seamless user experience? How can my company reconcile the gap between consumer readiness and implementing newer authentication technologies?

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Key market insights: 

  • 48% of practitioners planning to adopt passwordless solutions in the next two years prefer biometric authentication.
  • Only 5% of surveyed practitioners prioritize FIDO2 passkeys as their chosen passwordless authentication method due to limited consumer education.
  • 83% of businesses express concern about the security of OTPs, but 74% still plan to continue their use over the next two years.
  • 81% of solution seekers use identity platforms for customer authentication, with CIAM being the most popular, indicated by 47% of buyers.
  • AI-enabled adaptive authentication is seen by 64% of buyers as the most effective for balancing security and user experience.
  • 69% of buyers demand continuous authentication beyond login, valuing AI-enabled anomaly detection.
  • In the purchasing process for customer authentication, only 36% of respondents prioritize compliance, and just 9% consider it a top criterion, with a greater emphasis on scalability, solution accuracy, and authenticator variety.

Download the report for more insights and a buyer’s guide

Related content:

What is Customer Authentication?

Customer authentication is a critical security process that identifies and verifies users before allowing them access to digital accounts. It’s built on login credentials established during user onboarding, utilizing a blend of knowledge-based (passwords), possession-based (security tokens), and inherence-based (biometrics) authenticators. The adoption of multi-factor authentication (MFA) has become standard practice, requiring users to provide multiple identity proofs to enhance security and prevent unauthorized access.

This security measure is essential for protecting against common threats like account takeover attacks by ensuring that only authorized users can access sensitive information. Despite the prevalence of password-based systems, their effectiveness is compromised by common security pitfalls, such as the reuse of passwords. Therefore, more advanced authentication methods, including MFA and adaptive authentication, are increasingly important. These methods assess risk levels and adjust security measures dynamically, improving the security posture without compromising user experience. New technologies like FIDO2 passkeys and biometric authentication pave the way toward more secure, passwordless authentication methods, emphasizing ease of use and improved security.

Customer authentication is a crucial building block gatekeeper for user data and access in digital security. As the digital landscape continues to evolve, customer authentication methods have also undergone significant advancements, aiming to strike a balance between robust security and user-friendliness. This balance helps to ensure that authorized users can easily access the digital world while maintaining the highest level of security measures to protect sensitive information.

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