Strong Customer Authentication SCA

Running head: STRONG CUSTOMER AUTHENTICATION 1

Strong Customer Authentication (SCA)

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STRONG CUSTOMER AUTHENTICATION 2

Strong Customer Authentication (SCA)

In recent years, there has been an increase in incidences of fraud, particularly within the

card payment space. Companies such as Equifax have been the primary targets of data breaches

and fraud attacks. With the world witnessing rapid technological changes, there is the likelihood

that online attackers could capitalize on the technological advancements to up their game. This

means that several companies, especially those that rely majorly on online transactions, will face

significant fraud attacks in the coming years. However, the good news is that strong customer

authentication that is gradually attracting global attention could help organizations to improve

data security, reduce the impact of data breaches, and disempower fraud attacks (Gaynor, 2017).

With many people still unaware of SCA, several questions concerning what it entails and how it

could help to reduce data breaches and fraud attacks are likely to arise.

An element of SCA is the two-factor authentication with modern approaches to

authentication including biometric recognition where the focus can be on identifying a customer

by scanning fingerprints (fingerprint recognition) and face (face recognition). SCA could help

reduce the impact of data breaches and disempower fraud attacks since companies will have to

ensure that customers are identified and authenticated before they carry out transactions online or

on one-on-one interactions (Gaynor, 2017). A technology that can help companies or

organizations when it comes to strong customer authentication is the biometric sensor. With this,

the identification of customers using fingerprints or faces to determine whether they are carrying

transactions themselves can be made more accessible. Of course, SCA would make it hard for a

person to access another person’s online data or information. In the aftermath of the attack at

Equifax, it was believed that attackers could use the stolen or illegally obtained information

belonging to customers to access customers’ financial accounts with various financial institutions

STRONG CUSTOMER AUTHENTICATION 3

across the United States. It was further believed that hackers could use customers' data to

impersonate them with lenders or other service providers who rely majorly on personal

information from Equifax when it comes to making financial decisions concerning customers

(Bernard, Hsu, Perlroth, & Lieber, 2017). With SCA technology in place, such scenarios are not

likely to be witnessed in the near future. It would be difficult for hackers to access customers'

information with creditors, lenders, and other financial institutions unless they can produce the

actual fingerprints initially used by customers when registering with the various institutions.

In addition to biometric recognition, to ensure SCA, companies or organizations can

follow the step in the online payment space where the 3-D Secure (3DS) gives additional

protection to card users through the introduction of another layer of password protection. With

the 3DS, whenever customers initiate a transaction online or in one-on-one situations with

organizations, they receive a message with a code that must be provided to complete the

transaction. In most cases, the duration taken to receive the signal depends on the network upon

which the card used by the customer operates. In the event companies use the 3DS technology to

ensure strong customer authentication, they must make sure that the authentication code is

resistant to the risk of forgery or disclosure of any of the elements upon which the code is

generated (European Commission, 2017). Moreover, in such cases, companies are tasked with

ensuring that the authentication codes are based on solutions such as creating and validating one-

time passwords, digital signatures, or other cryptographically underpinned validity assertions.

STRONG CUSTOMER AUTHENTICATION 4

References

Bernard, T. S., Hsu, T., Perlroth, N., & Lieber, R. (2017, September 07). Equifax Says

Cyberattack May Have Affected 143 Million in the U.S. Retrieved from

https://www.nytimes.com/2017/09/07/business/equifax-cyberattack.html

European Commission. (2017, November 27). Regulatory Technical Standards (RTS) For Strong

Customer Authentication and Common and Secure Open Standards of Communication.

Retrieved from http://ec.europa.eu/finance/docs/level-2-measures/psd2-its-2017-

7782_en.pdf

Gaynor, B. (2017, December 13). PSD2: Are you ready for Strong Customer Authentication

(SCA)? Retrieved from https://internationalbanker.com/banking/psd2-ready-strong-

customer-authentication-sca/

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