Why Getting MFA Right Is Still a Challenge in Financial Services
Multifactor authentication is widely adopted across financial services. However, deploying MFA effectively — without disrupting customer experience or internal productivity — remains complex.
Unlike enterprise organizations and businesses in other industry sectors, financial services organizations must balance security against:
- High-frequency trading environments
- Call center operations with strict handle-time metrics
- Retail banking branches with shared workstations
- Remote financial advisers and hybrid corporate teams
- Customer-facing digital banking platforms
For internal users, the challenge lies in minimizing friction while maintaining strong identity verification. Relationship managers, underwriters or traders may log in to multiple systems throughout the day across different environments. Even small authentication delays can disrupt revenue-generating workflows.
For customers, the stakes are even higher. Financial institutions must deploy MFA that reduces fraud risk without degrading digital banking usability or driving customer abandonment.
In addition, third-party risk complicates the landscape. Financial ecosystems rely heavily on fintech partners, payment processors and cloud providers. Provisioning and deprovisioning third-party access must occur rapidly and consistently to meet regulatory expectations.
Increasingly, regulators expect near-immediate access revocation when personnel depart and clear recovery timelines when systems are disrupted. Meeting these expectations requires:
- Automated identity lifecycle management
- Continuous behavioral monitoring
- Strong integration between IAM, HR systems and security orchestration tools
Without automation, institutions struggle to meet both compliance mandates and operational demands.
FIND OUT: The technology trends for financial services organizations in 2026.
Auditing, Retention and Documentation: A Growing Burden
One of the most significant regulatory shifts in financial services involves auditability and documentation rigor.
Many institutions historically retained documentation indefinitely to minimize legal risk. However, modern compliance frameworks demand more structured governance:
- Defined data retention and destruction schedules
- Clear policy taxonomies
- Evidence of consistent log monitoring
- Documented control testing and validation
Financial institutions manage enormous volumes of data — transactional records, loan documentation, investment communications and customer service recordings. Storage costs continue to rise, and regulators increasingly expect defined retention decay periods rather than “keep everything forever” approaches.
At the same time, regulators want clear evidence that institutions are actively monitoring and responding to anomalies. This means:
- Centralized log aggregation
- Automated alert triage
- Documented incident response exercises
- Measurable remediation timelines
Manual processes cannot sustain this level of scrutiny. Automation, security information and event management and security orchestration platforms are becoming essential to maintain compliance at scale.
