What is risk-based authentication?

Risk-based authentication (RBA) is a cybersecurity approach that goes beyond traditional static login methods (like usernames and passwords). It dynamically assesses the risk level of each login attempt or transaction based on the risk and context. This allows businesses to tailor their authentication requirements accordingly.

In essence, RBA asks:

  • Who is trying to access the system? (User identity, location, behavior patterns)
  • What are they trying to access? (Sensitivity of the data or resource)
  • How are they trying to access it? (Device, network, usual login patterns)
  • When are they trying to access it? (Time of day, frequency of logins)

RBA systems assign a risk score to each interaction by analyzing these factors in real time. If the risk is low, users might experience a seamless login. Additional authentication steps (like one-time codes or biometric verification) may be required if the risk is high because of a potential account compromise. This is similar to how multi-factor authentication (MFA) works, but RBA adapts the level of authentication based on the risk.

Understanding risk levels in risk-based authentication

RBA systems categorize login attempts or transactions into different risk levels, typically:

  • Low risk: These interactions exhibit typical behavior patterns and pose minimal risk. An example might be a user logging in from their usual device and location during their typical working hours. Risk-based authentication might allow seamless access for low-risk events without additional authentication steps.
  • Medium risk: These interactions exhibit unusual behavior but don’t necessarily indicate malicious intent. An example could be a user logging in from a new device but still within their usual location. In this case, RBA might prompt user authentication for an additional authentication factor (e.g., a one-time code).
  • High risk: These interactions raise significant red flags and could signal a potential security breach. Examples include login attempts from an unfamiliar location, multiple failed logins, or unusual activity patterns. RBA might block the login attempt entirely for high-risk events or require more stringent authentication measures (e.g., biometric verification or a security question).

How does risk-based authentication work?

Let’s break down how risk-based authentication works in a step-by-step process:

Data collection

When a user attempts to log in or perform a transaction, the RBA system collects data about the interaction.

This data can include:

  • User identity (username, email)
  • Device information (type, operating system, browser)
  • Network information (IP address, location)
  • Behavioral patterns (typing speed, mouse movements)
  • Transaction details (amount, type)

Risk assesment

The RBA system feeds the collected data into a risk engine, which actively analyzes it against predefined rules and risk models.

These rules and models consider various factors:

  • User history: Past behavior, usual login patterns
  • Geolocation: Whether the login location is typical for the user
  • Device reputation: If the device has been used for suspicious activity before
  • Threat intelligence: Information about known attacks and compromised credentials

Risk score calculation

The risk engine assigns a risk score to the interaction based on the analysis.

The score typically ranges from low to high, representing the probability of the interaction being fraudulent or unauthorized.

Authentication challenge

Depending on the risk score, the RBA system determines the appropriate level of authentication: low, medium, or high risk.

Continuous learning

Risk-based authentication systems continuously learn from past interactions and adjust their risk models accordingly.

This enables them to adapt to new threats and improve their accuracy in detecting suspicious activity over time.

What are the benefits of using risk-based authentication?

Enhanced security

  • Adaptive protection: RBA adapts to the specific risk level of each login attempt or transaction. High-risk interactions receive more robust scrutiny, reducing the likelihood of unauthorized access or fraudulent activity.
  • Fraud prevention: By analyzing user behavior and other contextual factors, RBA can effectively identify and block suspicious activity, protecting businesses and customers from financial losses.
  • Account takeover mitigation: RBA helps prevent unauthorized access to user accounts by detecting unusual login patterns or compromised credentials, making it difficult for attackers to take over accounts.
  • Compliance: Risk-based authentication aligns with industry regulations and standards, such as GDPR and PSD2, by implementing robust security measures to protect sensitive data.

Improved user experience

  • Reduced friction: RBA often allows seamless access without requiring additional authentication steps for low-risk interactions. This streamlines the user experience and avoids unnecessary frustration.
  • Personalized authentication: Risk-based authentication tailors authentication requirements to the specific context of each interaction, avoiding overly burdensome security measures for trusted users.
  • Customer satisfaction: RBA can enhance customer satisfaction and loyalty by balancing security and convenience.

Operational efficiency

  • Automation: RBA automates much of the authentication process, reducing the need for manual intervention and freeing up resources for other tasks.
  • Cost savings: RBA can lead to significant cost savings for businesses by preventing fraud and reducing the need for manual reviews.
  • Scalability: RBA systems can quickly scale to accommodate growing user bases and transaction volumes, ensuring consistent security and performance.

FAQs about risk-based authentication

Related content

What is 2FA (Two-Factor Authentication), and how can you implement it?

Your customers’ security should be one of your highest priorities. Learn about 2FA and how it can help you protect your customers.

What is multifactor authentication (MFA)?

Multifactor authentication (MFA) is a security method that requires users to provide 2 or more verification factors to access an account.

What is passwordless authentication?

Passwordless authentication is a way to identify your identity without using a password. Instead, it uses more secure alternatives like possession factors or biometrics.

What is Domain Authentication?

Domain authentication is a way to verify that the email sender is who they claim to be.

What is Biometric Authentication?

Biometric authentication performs identification and authentication based on recognizable and verifiable data that is unique and specific to that person.

What is 3-Factor Authentication (3FA)?

Three-factor authentication is the use of a person’s live biometric data in addition to their security credentials and an authentication code sent by SMS.

Table of contents

Jul 9th, 2024
5 min read