Why it's time to say goodbye to passwords

Anyone who's ever clicked on a ‘forgot your password?' thinks there's gotta be a better way. There is.

When Wallaby Financial launches a new version of its app, which helps users maximize rewards and points, later this summer, it will be missing one notable feature: a password.

"We'll authenticate their email address or their phone number," says Matthew Goldman, CEO of Wallaby Financial. "We're going to send them a one-time code to either of those locations, and they'll have to enter that back in the system. You have to prove that you have control of that phone number or email address in order to log into our system."

Then, he says, if the user stays logged in, his phone's authentication system will stand in place of entering a password into the app every single time.

Wallaby Financial is one of many groups trying to get rid of passwords all together. In June, the blogging site Medium ditched passwords, too.

[Related: Medium stays firmly anti-password with radical e-mail-based logins]

The big reason?  Passwords don't really work.

The password problem

"The problem with passwords is most people are very bad at remembering them," says Goldman. "They have too many of them and so they resort to fundamentally insecure behavior in order to deal with the problem of remembering lots of passwords."

According to a survey by Telesign, a mobile identity company, 73 percent of online accounts use duplicate passwords, 54 percent of consumers use five or fewer passwords across their entire life online, 22 percent use three or fewer, and 47 percent haven't changed their password in five years.

"We know it's bad because if one system is hacked, all of your profiles across many systems become vulnerable," says Goldman.

Before our lives moved online, passwords worked. "It was designed in a world where there were maybe three logins in your life," says Boris Jabes, co-founder of Meldium, a password and account manager. "No one I think planned on it becoming how you'd log into 100 plus places in a year or a month."

Passwords aren't just a hassle for website users it's a hassle for developers, too.

"If I'm a corporation, if I'm a website, then I have to build all the infrastructure to manage your password, store them correctly, allow people to forget them," says Jabes. And even that's not perfect. "The whole infrastructure around that is vulnerable. Either people will have weak ones or you will store them poorly and you will become a vector of attack," he says.

Password alternatives now

The password alternative being tested out right now is exactly what Wallaby Financial is doing: two-step authentication, relying on the smartphone and the fact that most people have it with them at all times.

"We do see mobile being very key to helping solving this problem," says David Rockvan, senior vice president and general manager of Entrust Certificate Servces at Entrust Data. "People want to carry them. You don't have that issue of making them carry around something extra."

[Related: Beyond passwords with biometric technology]

Consumers trust their phones, too, so the near-ubiquitous handhelds are becoming "a trusted platform for multipurpose ID," Rockvan added. "When you put all that together, we really think the phone or smartphone is actually going to be something you can utilize to drive stronger identity, hence moving away from passwords"

Another trend: letting another group do the authentication for you. By the end of this year, Wallaby Financial will allow customers to login through Google.

"Seventy percent of our users are already signing in with a Gmail address," says Goldman. "On Android phones it's already built in. Ultimately that's more security than using some terrible password like dog5.'"

Medium, the blogging site, lets users log in with Twitter, Facebook or an email address.

Password alternatives down the road

Rockvan sees third-factor authentication becoming an important part of security in the future, too: things like biometrics with touch ID which Apple already uses and retinal scans.

But Meldium's Jabes still doesn't see those kinds of systems as a silver bullet that replaces passwords entirely.

"The reason you haven't seen a solution magically appear is it has to be better for users," he says. "I can remove passwords and give you a phone-based login but is that even going to get one tip of the registrations to my website? Users are going to be more confused."

He adds that while startup companies are presenting possible solutions, he doesn't see the industry making a total shift away from passwords until a giant like Apple, Microsoft, Facebook or Google comes up with a solution.

"I hate to say this because I'm someone who comes from the startup world," he says. "I think this is one of those where a major player has to do something in order for real change to occur."

Join the CSO newsletter!

Error: Please check your email address.

Tags Wallaby Financialsecurity

More about AppleEntrustFacebookGoldmanGoogleMicrosoftTwitter

Show Comments

Featured Whitepapers

Editor's Recommendations

Solution Centres

Stories by Jen A. Miller

Latest Videos

  • 150x50

    CSO Webinar: The Human Factor - Your people are your biggest security weakness

    ​Speakers: David Lacey, Researcher and former CISO Royal Mail David Turner - Global Risk Management Expert Mark Guntrip - Group Manager, Email Protection, Proofpoint

    Play Video

  • 150x50

    CSO Webinar: Current ransomware defences are failing – but machine learning can drive a more proactive solution

    Speakers • Ty Miller, Director, Threat Intelligence • Mark Gregory, Leader, Network Engineering Research Group, RMIT • Jeff Lanza, Retired FBI Agent (USA) • Andy Solterbeck, VP Asia Pacific, Cylance • David Braue, CSO MC/Moderator What to expect: ​Hear from industry experts on the local and global ransomware threat landscape. Explore a new approach to dealing with ransomware using machine-learning techniques and by thinking about the problem in a fundamentally different way. Apply techniques for gathering insight into ransomware behaviour and find out what elements must go into a truly effective ransomware defence. Get a first-hand look at how ransomware actually works in practice, and how machine-learning techniques can pick up on its activities long before your employees do.

    Play Video

  • 150x50

    CSO Webinar: Get real about metadata to avoid a false sense of security

    Speakers: • Anthony Caruana – CSO MC and moderator • Ian Farquhar, Worldwide Virtual Security Team Lead, Gigamon • John Lindsay, Former CTO, iiNet • Skeeve Stevens, Futurist, Future Sumo • David Vaile - Vice chair of APF, Co-Convenor of the Cyberspace Law And Policy Community, UNSW Law Faculty This webinar covers: - A 101 on metadata - what it is and how to use it - Insight into a typical attack, what happens and what we would find when looking into the metadata - How to collect metadata, use this to detect attacks and get greater insight into how you can use this to protect your organisation - Learn how much raw data and metadata to retain and how long for - Get a reality check on how you're using your metadata and if this is enough to secure your organisation

    Play Video

  • 150x50

    CSO Webinar: How banking trojans work and how you can stop them

    CSO Webinar: How banking trojans work and how you can stop them Featuring: • John Baird, Director of Global Technology Production, Deutsche Bank • Samantha Macleod, GM Cyber Security, ME Bank • Sherrod DeGrippo, Director of Emerging Threats, Proofpoint (USA)

    Play Video

  • 150x50

    IDG Live Webinar:The right collaboration strategy will help your business take flight

    Speakers - Mike Harris, Engineering Services Manager, Jetstar - Christopher Johnson, IT Director APAC, 20th Century Fox - Brent Maxwell, Director of Information Systems, THE ICONIC - IDG MC/Moderator Anthony Caruana

    Play Video

More videos

Blog Posts