This document discusses two-factor authentication (2FA) as a method to strengthen user authentication beyond just a username and password. It describes how 2FA uses two different factors, something you know and something you have/are, to verify identity. Specifically, it evaluates using one-time passwords (OTPs) with hard tokens, mobile tokens, and SMS. While hardware tokens are very secure, they are also expensive and inconvenient. Mobile tokens are cheaper but still vulnerable to attacks. The best approach recommends sending the OTP via mobile token while sending transaction details via SMS to separate the factors and prevent SIM swap attacks. The document provides recommendations like using HTTPS and hashing to further improve security with 2FA.

1. Some thing you know and Some thing you have.
Two Factor Authentication
Submitted By: Saba Hameed
CT-025

2. Agenda
Authentication
Authentication Factors
Two Factor Authentication (2FA)
Business Need for 2FA
2FA Using OTP Hard Tokens
2FA Using Mobile Tokens
Security Analysis
Conclusion & Recommendations

3. Authentication
 Authentication is the process of verifying the
identity of user.
 The most common technique to authenticate a
user is to use username and passwords

4. Authentication Factors
Something you know
Something you have
Something you are

5. Threats to Passwords
 Social engineering
 Phishing
 Brute force attacks
 Shoulder surfing
 Keystroke logging
 Eavesdropping
 Dictionary attacks

6. Two factor Authentication
 It is an approach to authentication which requires
the presentation of two different kinds of evidence
that someone is who they say they are.

7. Customer
Confidence
Regulations
& Best
Practices
EFT ACT
2007
PCI DSS
NIST
Threat
Prevention
Phishing and
Packet Replay
and Man in
the middle
attacks
Fraud
Prevention

8. Tokens
Hard Token USB Token Smart Card Soft Token
Mobile Token
 OTP is a second layer of security to verify your
identity.

9. Types of OTP
 Software – OTP
An one-time password (OTP)
generated by the company and
sent to your mobile phone or PC.
 Hardware – OTP
An OTP generated by a security
device/token. You press the button
on the security device/token to
obtain the OTP.
 Event Based OTP
Here the moving factor is
triggered by an event
 Time Based OTP
Here the moving factor is
time.

10. 2FA Using Hard Token
Courtesy: RSA SecureID

11. Security Analysis
Benefits
 It is secure against
packet replay attacks.
 It prevents against
phishing.
Threats
 User needs to carry
the device
everywhere, and there
is a risk that it may get
stolen or lost.
 Cost is very high.
 Vulnerable to active
attacks and Man in the
middle attacks
 

12. 2FA Using Mobile Tokens
 It makes use of:
 Application installed on user’s mobile
 IMEI
 Time Stamp
 Seed
 Algorithm Used:
Time based One Time Password Algorithm/ HMAC-
SHA 1

13. How it works
 User Registration on Server
•Seed
•Pin
•IMEI number
•Time Stamp
difference
Mobile
Application
Mobile
Application
Auth Server

14. How it works
 OTP Generation
Same Seed
Algorithm
Time
Seed
Algorithm
Time
Seed
159759 159759
Same Time
Same OTP
Mobile
Application
Authentication
Server

15. How it works
 Login session

16. Security Analysis
Benefits
 A relatively cheaper and
flexible means of OTP.
 User just need to carry
their mobiles with them,
no extra device is
needed.
Threats
 Still vulnerable to
active attacks
 Man in the middle
attacks
 Man in the browser
attacks
 

17. Solution?
 1. Challenge Response
Mechanism
 For fund transfer
transactions, the server
generates a a code and
sends to the user. The
user enters the code
provided to the Internet
banking site in order to
commit the transaction.
Challenges:
•High Cost required
•Hardware required

18. Solution?
2. SMS with Transaction Details

19. Security Analysis
Threat:
 Mobile is now single point of failure. OTP is
generated/ received on mobile and the
verification code of transaction is also received
via sms on mobile. If attacker has the
possession of user’s mobile, then he can do
everything.
My Recommendation:
 It is necessary that a different medium is used
for receiving OTP and receiving transaction
verification code.

20. Conclusions
Method Threats Effective Against Man
in the Browser attak?
Static Passwords Can be lost and easily
obtained
Brute force attacks
possible
No
Biometric No
OTP Hard Tokens User has to carry the
token
No
OTP Soft/ Mobile Token Man in the middle
attacks
No
OTP with Signature
(Challenge Response)
Secure against man in
the middle attacks
Yes, but inconvenient
OTP with SMS
Transaction Detail
Secure against
Phishing, Packet
Replay, MIM and MITM
Yes!!

21. My Recommendations
 User should check and make sure the website
has https in the URL, so that the password goes
encrypted while transmission.
 The OTP and PIN should be hashed before
sending.
 Mutual authentication should be established
between the client and the server before the
session starts to ensure the user that server can
be trusted.
 Using split key technique for authentication.

22. References
 Mohamed Hamdy Eldefrawy, Khaled
Alghathbar, Muhammad Khurram Khan, “OTP-
Based Two-Factor Authentication Using Mobile
Phones”
 Roland M. van Rijswijk – SURFnet
bv, Utrecht, The Netherlands, “tiqr: a novel take on
two factor authentication”
 Fadi Aloul, Syed Zahidi, “Two Factor
Authentication Using Mobile Phones”
 Costin Andrei SOARE, “Internet Banking Two-
Factor Authentication using Smartphones”

23. Q & A Session