These days, passwords just are not enough to prevent fraudsters from gaining unauthorized access to sensitive financial information. They can be easy to guess, and too many people use the same password for multiple accounts.
Enter the use of multi-factor authentication as the solution. MFA relies on a combination of tools to verify the authenticity of the user. Consumers increasingly expect to use MFA when logging in or making a purchase, especially in their banking institutions. But it’s not as easy as clicking a button. This guide explains the challenges and best practices in implementing a robust MFA program.
Modern Challenges in Preventing Unauthorized Access
Relying on only passwords is not a sound idea. Even though phishing and other digital scams have been around for decades, people still choose passwords like “123456.” The password as the only line of defense is even more risky under threats like credential stuffing, where hackers use knowledge of one password to gain access to the user’s other accounts with the same password. In this climate, it’s not surprising that people are more interested in finding ways to protect their financial data. A 2023 survey revealed that a majority of consumers prefer to have their banking institutions verify their identities every time they log in.
Common Issues in Deploying Multi-Factor Authentication
Why has it taken some organizations so long to move past single-factor authentication? Customers might be an easy scapegoat for these institutions, but the true answer is infrastructure. A 2022 survey showed that nearly half of organizations had not implemented MFA, citing a lack of resources or skilled personnel as the main reason. Getting people to use MFA effectively is another challenge. Microsoft reported in 2025 that 99.9% of compromised accounts did not have MFA activated. When customers are asking for MFA, clearing the hurdle of implementing it becomes the next logical step.
Best Practices for Implementing Multi-Factor Authentication
Deploying MFA isn’t going to happen overnight, but when done correctly, the results are typically well worth the effort. The FFIEC, which sets compliance standards for federal review of financial institutions, recommends that institutions follow industry best practices for user authentication.
Conduct regular risk assessments — The trick to keeping cyber threats at bay is to know what the likely threats are. Institutions should perform regular risk assessments to identify weak points in their user management or digital security. Most importantly, that risk assessment should lead to updates or adjustments that will improve functional security for the institution.
Vary MFA options based on risk — Certain users may require additional verification before the institution allows access, and the organization should be prepared to implement it. Many institutions are implementing risk-based authentication, which collects data on users’ typical actions and creates additional identification hurdles when a user diverts from common behaviors. Adding protections to the users most at risk may slow them down a little but could prevent a significant loss.
Leverage effective forms of authentication — People who are used to two-factor authentication might wonder why it went out of style. The answer is simple: 2FA only calls for two specific forms of authentication, both of which are often easy to spoof. MFA varies the authentication type on the risk level and other factors, allowing the organization to provide the most comprehensive threat protection. MFA usually relies on authenticators drawn from multiple categories:
- Passwords and PINs
- Smart cards, FIDO keys, or access to a mobile device
- Biometric verification, like a fingerprint or facial recognition
Users may be able to customize their options to some degree, but over-reliance on one or two specific options can become a liability over time.
Create layers of security — Establishing MFA is a big step forward in cybersecurity, but it is only one part of the package. Financial institutions should implement a range of systems designed to detect, control, and correct for unauthorized access, including MFA. The organization must ensure that its system can rapidly detect an unauthorized login attempt and alert administrators for prompt review and action.
Educate users and customers — MFA can only go so far. Users still need to take precautions. For example, AitM attacks rely on collection of information before the actual login stage to gain sensitive information they can use to get past MFA. Too many people get scammed because they think they are talking to a bank employee when they hand over the security code received via text. Proper training in how to use MFA and the latest scam techniques (as part of digital onboarding for banks) can arm customers with the information they need to protect themselves.
Preventing criminals from getting access to users’ financial data is an ongoing challenge. Financial institutions that want to prevent unauthorized access can use multi-factor authentication to minimize their customers’ risk. With an understanding of the common challenges and best practices, MFA implementation can increase security without compromising efficiency.
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Author bio: Jack McBee has worked in content and communications at Q2 for over a decade, and currently serves as Director of Content & Communications. A seasoned professional with extensive experience in content and communications, McBee expands brand visibility while building meaningful customer engagement at the leading financial industry software provider.
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