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Posted 10th January 2022

Why are Passwords Bad for Business?

Would you believe that 87 per cent of internet users have found themselves locked out of an account at some stage? This surprising statistic highlights how passwords are the thorn in the sides of many people online.

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Why are Passwords Bad for Business?
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Would you believe that 87 per cent of internet users have found themselves locked out of an account at some stage? This surprising statistic highlights how passwords are the thorn in the sides of many people online. The average person has more than 100 passwords, and they’d have to be a robot to remember them all. From a business perspective, when users forget their login credentials it can be highly detrimental as they may decide to move to a rival. It could be time to move away from passwords and onto newer methods of security.

 

What Happens When Customers Forget Passwords?

Judging by the statistic noted above, most people have been in a situation where they’ve forgotten their password. The whole point of a password is to provide a secure method of logging in somewhere, so if you click the button to say you forgot your password, it’s far from a simple process to get a new one. You may have to wait for an email, answer questions, or even phone the company in some circumstances. These roadblocks cause frustration and may make people question whether it is worth going through the hassle of getting a new password. Lost passwords can also lead to disastrous consequences. There are horror stories of would-be millionaires being locked out of their bitcoin fortunes after forgetting the credentials for their digital wallets. Stefan Thomas is the most famous example, and it was widely reported he only had a couple of guesses left to get his hands on his $220 million fortune.

 

What Alternatives are There to Passwords?

Passwords are an outdated method of security, especially when people are logging on to so many different sites. Nowadays, sites are asking for more complex passwords than ever, but only 30 per cent of internet users enable a password manager to handle them all. It’s time that businesses start to look towards more hi-tech methods of security, as these are expected to replace passwords in the future. Companies lose money on sales when customers forget passwords, with 92 per cent of people opting to abandon a purchase at some point in their lives rather than recover their password. There are knowledge-based authentication alternatives that could represent a more user-friendly way of entering a site, such as passphrases, knowledge-based questions and one time passwords. Considering the statsm having more options could be the way forward.

 

Should Businesses Offer Different Methods?

Instead of forcing customers to use a password, businesses could try to adapt to the changing landscape and offer them several alternative methods upon joining. One user may prefer to use a password with a password manager, while another could decide to use knowledge-based questions. It is also wise for business owners to investigate biometrics and see if these can be implemented. They provide heightened security and are much simpler than passwords.

The last thing you want as a business owner is for customers to flock to one of your rivals because they’ve forgotten their password and can’t be bothered to retrieve it. It’s time to incorporate alternative methods to appease as many people as possible.

Categories: News, Strategy


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