SAN FRANCISCO—Despite claims that “passwords are dead,” this method of authentication remains widely used among the financial industry and consumer-oriented websites, according to research released by Javelin Strategy & Research.
The companies “In Search of a Better Password Policy” found that vulnerabilities such as password reuse, targeted malware, data breaches and social engineering continue to contribute to the rising rates of identity fraud. That survey examines financial institutions’ public-facing password policies for maximum security and consumers’ password habits that create opportunities for fraudsters.
“Passwords face six major security challenges, half of them are criminal in origin and the other half are due to consumer’s poor password practices,” Javelin said. “Consumers with more than 20 online accounts experience identity fraud at a 37% higher rate than the average consumer because of password reuse. Criminals depend on password reuse to render credentials from seemingly non-sensitive accounts into something far more valuable. With breached credentials in hand, cybercriminals leverage software that allows them to test the validity of compromised credentials at hundreds of online sites automatically.”
The company has created what it said is a cipher for consumers to use to create easy-to-remember but tougher-to-crack passwords, which it explains in a video it has created that can be found here.
“While many anticipate a future free of passwords, a balanced approach to improving security while preserving the experience of accountholders is critical,” said Al Pascual, director of fraud and security for Javelin Strategy & Research. “Financial institutions need to strengthen their password policies in order to stymie fraudsters, but that is not enough. Poor user habits are the other half of the password-security problem. Accountholders should be empowered with practical advice to securely create and manage their passwords.”
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