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Confronting Identity Theft Head-On with Multi-Factor Authentication

Methods of identity theft have outpaced popular security measures, necessitating a new standard in data defense

The online world has become a dangerous place. According to a survey, 90 percent of all companies fell victim to a security breach in the last twelve months. Hacking and advanced persistent threats (APTs) have rendered the two-factor authentication token, now over 20 years old, essentially obsolete. Without question, a real need exists for a truly secure approach to real-time multifactor authentication to combat today's modern threats.

Remote Access Spikes Security Risk
The use of online services has exploded in the last decade as enterprises have adopted remote access as the default way to access systems and conduct business. With the pervasive use of online access to conduct business, the threat of identity theft has increased with stunning speed and complexity. Ponemon Research surveyed more than 500 corporations and found that 90 percent had been successfully hacked in the last twelve months. This finding underscores the need for major enterprises to adopt stringent, effective security methods as a means to protect against breaches. As a result, modern mobile phone-based multifactor authentication is in high demand.

Advances in Hacking
In the same way that the remote access industry has evolved, so have threats and their complexity. In the early days of online services, usernames and passwords were typically the only form of authentication. To defeat them, hackers used "brute force" attacks to guess the username or password, or "dictionary attacks" to assume a user's identity. In a dictionary attack, a computer or a hacker attempts various combinations of potential passwords until access is granted.

Systems eventually evolved to block these attempts by locking the account down after a few faulty attempts, leading hackers to develop new techniques like key loggers. Today, the most widely used attacks are pharming, phishing or a combination of the two. These terms describe methods by which users are led to a counterfeit website that looks just like the original. This tricks the user into entering his or her username and password. Some of the more advanced attacks send stolen information to the hackers in real time via a small instant message program, compromising many popular two-factor authentication tokens. As an example, Zeus malware captures a user's credentials - even advanced time-based token codes - and sends the information to the hacker.

As if that weren't enough, newer and more sophisticated methods of intercepting user interactions with online services have emerged in recent years, including man-in-the-browser, man-in-the-middle and session hijacking. Even the most secure traditional two-factor authentication token devices can no longer secure a user's identity against these new, more insidious threats. Yet many organizations are unaware that traditional tokens can be compromised, posing a significant security risk.

Many Security Technologies Fall Short
Today's ever-changing threat environment creates a never-ending battle wherein organizations must constantly evaluate the right level of investment in security. Often, the best possible protection is not financially feasible for many organizations, and thus a trade-off has to be made. To protect against identity theft schemes within budgetary constraints, organizations have sampled different technologies, including certificates, biometric scanning, identity cards and hard- and software tokens, with the latter being the most dominate technology. Certificates are often viewed as the ideal way to connect two devices with a secure, identifiable connection. The main issue is the deployment and administration of these certificates and the risks that these are copied without the user knowing it. Furthermore, the certificate authority might be compromised as well.

Biometric scanning has also enjoyed some success, often seen as a very secure alternative. However, the assumption that you always have a functioning finger or iris scanner handy has proven impractical, and the resulting scan produces a digital file that can itself be compromised. Another alternative is the identity card, which often proves impractical in a world of Bring Your Own Device ("BYOD"), where users demand access from an ever-changing variety of devices. Therefore, a new approach is needed.

A Mobile Approach to Security
Many organizations have begun using multi-factor authentication based on mobile networks to address today's modern threats while meeting a user's need for easier and more flexible solutions.

Two elements drive the adoption of the new crop of multi-factor authentication: one, the need to deliver hardened security that anticipates novel threats; and two, the need to deploy this level of security easily and at a low cost. The device used in the authentication process also needs to be connected to the network in real time and be unique to the user in question.

If the authentication engine sends a regular token via SMS, however, today's malware threats can steal the code easily. Therefore, organizations must seek strategies that operate efficiently in a message-based environment to successfully defend against modern threats. Key elements can include:

  • One-time password: To get the highest possible level of security, the one-time password (OTP) must both be generated in real time and be specific (locked) to the particular session, as opposed to tokens that use seed files where the passcodes are stored.
  • Minimal complexity: To minimize infrastructure complexity, the solution should plug into different login scenarios, such as Citrix, VMware, Cisco, Microsoft, SSL VPNs, IPsec VPNs and web logins. Other ways to minimize infrastructure overload include providing these logins in an integrated, session-based architecture.
  • Multiple defenses: To support real-time code delivery, the organization needs robust and redundant server-side architecture along with multiple delivery mechanism support, regardless of geographic location.
  • Easy management: The solution should be able to be managed easily within the existing user management infrastructure.
  • Context-specific: To maximize security, the company should leverage contextual information - such as geo-location and behavior patterns - to effectively authenticate the user.

The Security Horizon
The modern convenience of online services has brought with it the modern scourge of identity theft. Methods of identity theft have outpaced popular security measures, necessitating a new standard in data defense: session- and location-specific multi-factor authentication. This kind of real-time solution, delivered to a user's mobile phone, can provide the security organizations must have if they hope to protect their employees, users and data from modern online threats.

More Stories By Claus Rosendal

Claus Rosendal is a founding member of SMS PASSCODE A/S, where he oversees the product strategy and development in the role of Chief Technology Officer. Prior to founding SMS PASSCODE A/S, he was a co-founder of Conecto A/S, a leading consulting company within the area of mobile computing and IT security solutions with special emphasis on Citrix, Blackberry and other advanced handheld devices. Prior to founding Conecto A/S, he headed up his own IT consulting company, where he was responsible for several successful ERP implementations in different companies (C5 / SAP). Claus holds a Master Degree in computer science from University of Copenhagen.

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