Will Passwords Finally Be a Thing of the Past?

Will Passwords Finally Be a Thing of the Past?

April 8, 2021

For many years, fraud and data security experts have been warning that passwords are not a secure online authentication method. It appears, finally, that consumers agree, which may pave the way for higher adoption of “invisible” methods of verifying online identities.

For the first time since its inception, respondents in Experian’s 5th Annual Global Identity and Fraud Report did not identify passwords as the most secure method for authenticating a user’s identity. In fact, passwords did not appear in the top three.

The top three most preferred methods for authentication are physical biometrics (including facial recognition and fingerprints), authentication codes sent to a separate device and behavioral analytics (passively observed actions that require no effort from the consumer).

“Consumers want to be recognized digitally without extra steps to identify themselves, and they don’t want to remember yet another password,” said Eric Haller, executive vice president and general manager of Identity, Fraud and DataLabs for Experian. “They are open to more practical solutions in today’s digital era. Businesses must be able to properly identify their customers from fraudsters otherwise they are not only risking financial loss but also customer trust, which is critical for today’s digital consumer. There’s an opportunity for companies to modernize their authentication that doesn’t require heavy customer involvement and doesn’t take away from a seamless digital journey.”

Experian’s research also found that consumers are more concerned about online privacy and identity theft than they were before the pandemic. And, the pandemic seems to have affected younger consumers more than older ones—49 percent of those under 40 are more concerned about fraud now than before the pandemic compared to 37 percent of those over 40.

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