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Risk-Based Authentication: How Can It Help Your Business?

Risk-Based Authentication: How Can It Help Your Business?

Fintech
Sayoni Sinha
Sayoni Sinha

March 22, 2022


As we accelerate towards digital transformation, the risk of data breaches for businesses cannot be overlooked. In 2021, more than 60% of mid-sized Indian organisations fell victim to a cyberattack. It’s no secret that data breaches are costly events for businesses and financial organisations. In their 2021 Cost of a Data Breach Report, IBM reports that breaches between May 2020 and March 2021 cost an average of $4.24 million, a 10% increase from the $3.86 million reported in the previous year.

As we advance, cybercriminals will continue to get more sophisticated in their attacks. In this blog, we discuss how risk-based authentication can be an essential element of your security strategy – and how it enables you to improve customer satisfaction, cut fraud losses, and be compliant.

How Does It Work?

Risk-based authentication (RBA) uses risk scores to determine whether someone should be allowed to access your site or not. The scores are calculated based on risk rules that analyse various factors such as device, IP, phone number, and email id. For instance, the risk score will be higher for users accessing your platform from a denylisted device or a spoofed IP address, thereby blocking their access to the site. The purpose is to stop ‘bad’ users while allowing ‘good’ users to access online services without friction. Bad actors are put through additional verification such as passphrases, 2FA codes, or other ID documents.


Risk-based authentication has become increasingly important in recent years, as ID fraud, transaction fraud, and account takeovers (ATOs) continue to skyrocket. In 2021, the number of data breaches rose to 36% from 22% in 2020. Therefore, effective authentication for identity verification is essential to prevent unauthorised access to sensitive data. By using real-time intelligence from various data signals, RBA helps put forth a holistic picture of the profile behind each login.


When a user attempts to sign in, a risk-based authentication solution analyses the following:


  • Device: Does the device have a prior denylisting history? Has the user logged into the device for the first time, or is it a familiar device? 
  • Geolocation: Is the person in another time zone? Or the one he regularly logs in from?
  • Network: Is the person logging in from a familiar IP address? Or is that data foreign?
  • Sensitivity:  Is the requested file a sensitive one? Or is it a relatively unimportant piece of information?


After considering all these factors, the system makes a decision. The user can either:

  • Use a familiar system, such as a password, to gain access.
  • Offer proof in the form of verification to gain entry.

Why Use Bureau’s Risk-Based Authentication?

As data breaches and cybercrimes increase, so does the need for stronger authentication and fraud prevention measures. At the same time, however, putting customers through additional security measures can test their patience. ​​With a solution like Bureau’s risk-based authentication, any business can improve their customer experience and unlock growth. Bureau’s RBA assimilates data from user inputs, device, behavioural history, and digital footprints to draw up comprehensive risk-gauged profiles for each user and match them with the details provided by the applicant. High-risk profiles are then flagged for further checks, while those with matched-up profiles are granted a smooth onboarding process. 


Bureau’s RBA solution uses a risk engine with machine learning to detect fraud better. It ensures that your users are who they claim to be while transacting on your platform. Ultimately, it helps filter out suspicious users.

To know more about automating decisions, read more here.

Bureau’s RBA For Safety and Security

  • Reduces Fraud and Improves Compliance

For customers, transacting with financial institutions has to be accessible and secure. It should be so easy and frictionless that customers don’t even think about the security. Studies reveal that consumers generally don’t think about security until it gets breached. And when that happens, they generally tend to blame the brand. Therefore, safety must be well taken care of to provide an optimal customer experience, as that will be one of the pillars of growth for your business. Bureau’s RBA can deploy a wide range of inputs to make real-time decisions to evaluate users. As they ‘learn’ more, the risk score can accurately assess threats and check for emerging fraud patterns.

  • Reduce Friction and Improve Customer Loyalty

RBA helps catch bad actors but allows good users through seamlessly.  In simple terms, it means allowing a user to get onboarded without providing additional documentation or more authentication.

  • Automation Helps in Scaling

Finally, one of the most significant advantages of RBA is that it’s automatic. So it can certainly alleviate the load on your risk management team as they can concentrate on more substantial threats and look into fine-tuning the system and reviewing users that the system has flagged for review. 

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