SMS-based one-time passwords were a useful upgrade from passwords. They are no longer a defensible second factor. SIM-swap fraud, SS7 interception, phishing-prone OTP relay, and the broader telecom-trust assumption all push enterprises and regulators toward hardware-rooted alternatives — particularly in markets like India where SMS-OTP is still the default second factor across banking, government, and telco.
Multi-Factor Authentication
A simple password doesn't cut it for most systems. MFA grants access only after presenting at least two pieces of evidence:
- Knowledge Factor — Something you know (password, PIN, answer)
- Possession Factor — Something you have (token, card, mobile device)
- Inherence Factor — Something you are (biometric data)
MFA-enabled accounts require a second code generated through an alternative medium in addition to a traditional password.
SMS-based OTP Authentication and Its Disadvantages
Smartphones give us access to numerous services online — banking, shopping, social media, etc. This rise in connectivity gave rise to data theft. To overcome breaches, many providers introduced SMS-based OTP authentication. The concept is to enter an OTP received on your mobile to verify credentials. But SMS-based OTP authentication can also be compromised.
Disadvantages of SMS based OTP Authentication
- Low level of security for a Second Factor Authentication Method — SMS OTP is more like a two-step verification because you simply receive a message on your phone. Messages can be intercepted and copied by malware.
- Unsecure to Open Networks — Open or unsecured networks are the lurking ground for hackers (Man-In-The-Middle). Uploading malicious software becomes easy.
- Unencrypted Messages — SMS OTP is plain text passing through channels with weak security. SIM swap attacks let hackers obtain new SIMs and receive OTPs.
- Privacy and Security of Message not Guaranteed — Most network operators cannot provide proper security measures.
Why is SMS-based 2FA still so popular?
- Original assumptions about cellular network/handset security no longer hold; specialized Trojans hijack mobile phones.
- OTP requires reliable cell signal and battery life.
- Occasional SMS delivery failures.
- 3rd-party messaging providers often incur per-text charges.
Going beyond SMS authentication
FIDO2 is a standard that uses public-key cryptography and origin binding to resist phishing: the authenticator only signs for the origin the credential was registered to. That makes it phishing-resistant — one of several such factors, alongside certificate-based credentials like PIV. AmbiSecure cards and keys combine hardware-based authentication and public-key cryptography. AmbiSecure helps organizations accelerate to a password-less future via the FIDO2 protocol. The card and key require no battery or network connectivity.
About Ambimat Electronics
Close to 4 decades of design experience. Solutions include AmbiPay, AmbiPower, AmbiCon, AmbiSecure, AmbiSense, AmbiAutomation across smartwatches, smart homes, medical, robotics, retail, pubs/brewery, and security.
References
- https://fossbytes.com/heard-blue-screen-of-death-there-are-black-red-green-white-purple-gray-yellow-brown-also/
- https://blog.securedtouch.com/digital-officers-guide-multifactor-authentication