out-of-band authentication

Contributor(s): Matthew Haughn

Out-of-band authentication is a type of two-factor authentication that requires a secondary verification method through a separate communication channel along with the typical ID and password.

Out-of-band authentication is often used in financial institutions and other organizations with high security requirements. The practice makes hacking an account more difficult because two separate and unconnected authentication channels would have to be compromised for an attacker to gain access.

One secondary method for out-of-band authentication is the practice of requiring the user to make a phone call from a registered number or respond to an automatically-generated phone call from the institution. For further security, voiceprint technology may be used to provide biometric verification. Another method is to require the user to text a code displayed after login from their registered smartphone to the institution.

Out-of-band authentication secures communications with only a slight increase in complexity for a user. The methods are also much cheaper to deploy than security key fobs or more complex biometric methods.

There are a number of ways that a determined criminal can find a way around out-of-band authentication. For example, a hacker may attempt to get the customer's phone number changed on the account, substituting his own phone number. In this case, the technology's effectiveness depends on the bank adhering strictly to policies against making changes to an account without phone confirmation, or transferring money without that extra authorization. 

Smartphones can also be a weak spot in out-of-band-authentication. If people use the same phone for Web banking that they use for SMS authentication, they’re nullifying the effectiveness of the secondary measure. In either case, the effectiveness of out-of-band authentication relies upon adherence to the proper procedures.

This was last updated in December 2014

Next Steps

Many financial institutions are using out-of-band authentication to secure online or mobile transactions, but not all companies have a ready-made business case for multi-factor authentication and not all products are created equal. Check out this comparison of the top MFA products and learn more about solutions like CA Strong Authentication and SafeNet Authentication Service.

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What's the biggest weakness of out-of-band authentication?
Out-of-band authentication has several weakness including man-in-the-middle attacks targeting the browser (MITB)/ mobile phones (MitMo) and intercepting text messages while in transit. The biggest weakness however stems from a user not completing the registration process and a hacker getting access to their account and providing a phone number they have access to or registering a user to a service they are not currently registered in. The hacker can then carry out transactions like the user.