Multi-factor authentication (MFA) is an identity verification process that requires users to enter more information than just a password. MFA adds additional layers of security by requiring a combination of something you know (like a password or PIN), something you have (like a smartphone or hardware token), and something you are (like a fingerprint or facial recognition). 

Relying solely on passwords poses significant security risks, as they are vulnerable to phishing attacks and data breaches, exposing sensitive customer information. MFA mitigates these risks by adding layers of verification, preventing unauthorized access even if passwords are compromised. Protecting sensitive information is crucial for preventing account takeovers, which can lead to financial loss and/or brand damage. 

Increasing regulations, such as FSC Standard 29, NIST Passkeys Supplementary Guidelines, and SCA PSD2, aim to enforce stronger authentication measures to protect consumers.

MFA requires users to present two or more types of verification. These include something you know, such as a password or PIN; something you have, like a cryptographic key, smartphone, or security token; and something you are, such as biometric identifiers like fingerprints or facial recognition. This multi-factor approach improves customer security by preventing unauthorized access even if one or more factors are compromised.

Knowledge Factors (Something You Know):

Traditionally, this factor involves a password or a PIN. However, with passkeys, this factor can be completely eliminated, as passkeys provide a more secure alternative to passwords by using cryptographic key pairs.

Possession Factors (Something You Have):

• Passkeys: Passkeys are cryptographic key pairs that replace passwords. They consist of a private key (stored on the user’s device) and a public key (stored on the service provider’s server). During login, the user’s device signs a challenge with the private key, which the server verifies using the public key.
• Authenticator Apps: Apps that generate one-time codes, like Google Authenticator.
• Hardware Tokens: Physical devices that generate or display a code.

Inherence Factors (Something You Are):

This factor uses biometrics, such as fingerprints, facial recognition, or voice recognition, to verify the user’s identity. Passkeys often integrate with biometric authentication, making logins both secure and seamless.

Adaptive Multi-Factor Authentication (also known as Risk-Based MFA) uses contextual information and business rules to determine which authentication factors to apply to a specific consumer in a particular situation. This method adjusts authentication requirements dynamically to protect user data by increasing security measures during high-risk actions and optimizing user experience for low-risk actions. By integrating Authsignals' no-code rules and policy engine into your existing identity stack, you can enable fraud teams to quickly and seamlessly deploy Adaptive Multi-Factor Authentication into your user journeys, effectively balancing security and user experience.

Adaptive Authentication solutions can step up or step down authentication methods based on a broad range of contextual factors. Here are some examples below:

• Geolocation: Login attempts from unusual or high-risk locations.
• Device Recognition: Unrecognized or new devices attempting to access an account.
• IP Address: Login attempts from suspicious or blacklisted IP addresses.
• Time of Access: Unusual login times compared to the user’s typical access patterns.
• Login Frequency: Anomalous increase in login attempts within a short period.
• Behavioral Biometrics: Deviations from the user's typical typing speed, mouse movements, or touch patterns.
• Network Anomalies: Use of unsecured or public Wi-Fi networks.
• Account Activity: Suspicious account activities, such as changes to account settings or multiple failed login attempts.
• Location Consistency: Inconsistent login locations within a short time frame (e.g., logging in from two different countries within an hour).
• Device Security: Status of device security, such as whether it has up-to-date antivirus software or a jailbroken/rooted status.
• User Role: Higher risk associated with certain user roles (e.g., administrators vs. regular users).
• Historical Data: Previous incidents of suspicious activities or security breaches associated with the account.
• Session Duration: Unusually long or short session durations.
• Transaction Patterns: Deviations from regular transaction patterns or amounts.
• Environment: Access attempts from risky environments, such as internet cafes or shared computers.
• Software Version: Login attempts from devices running outdated or unpatched software.
• Referrer URLs: Suspicious referrer URLs leading to the login page.
• User-Agent String: Abnormalities in the user-agent string of the web browser.
• Email Security: Login attempts following email account changes or email security issues.‍
• Account Age: New accounts versus established accounts.

Building your own multi-factor authentication (MFA) system can seem like a way to have full control over security, user experience, and branding, but it's a complex undertaking with several critical considerations:

Pros of Building Your Own MFA:

1. Customization: You can tailor the MFA system to fit your specific needs, including unique user flows or specialized security requirements.
2. Control: Full control over the system allows you to adjust and iterate as needed without relying on third-party providers.
3. Brand Integration: You can fully integrate the MFA process into your brand experience, ensuring consistency across all user interactions.

Cons of Building Your Own MFA:

1. Resource Intensive: Developing, testing, and maintaining an MFA system requires significant time, financial investment, and expertise. You'll need a dedicated team for continuous updates and monitoring, especially to address emerging security threats.
2. Security Risks: Security is the primary function of MFA, and any missteps in implementation could lead to vulnerabilities. Established MFA providers have dedicated teams and extensive experience in securing their systems.
3. Compliance Challenges: MFA solutions need to comply with various regulations and standards (like GDPR, PSD2, and NIST). Ensuring your system meets these standards can be complex and resource-draining.
4. Scalability and Reliability: Building a system that scales with user growth and handles peak loads reliably is challenging. Established MFA solutions have already solved these problems with a robust infrastructure.

Alternatives to Building Your Own MFA:

1. Third-Party Providers: Services like Authsignal provide robust, scalable, and secure MFA solutions that can be easily integrated into your existing identity infrastructure.
2. Hybrid Approach: Use third-party providers as a base and build custom layers or integrations on top to achieve the desired level of customization while leveraging the security and reliability of established MFA solutions.

Building your own MFA is a significant investment and is usually only justifiable if your organization has specific needs that existing solutions cannot meet. For most companies, leveraging third-party MFA services like Authsignal provides a balance of security, ease of use, and integration capabilities without the extensive overhead of building and maintaining an in-house solution.