The Small Business Guide to Multi-Factor Authentication

A man holding a phone with a fingerprint unlock option representing multi-factor authentication

Multi-Factor Authentication (MFA) can potentially protect you from 99.9% of account compromise attempts. Don’t believe it? Keep reading; there’s a link to the research in this article. You’ve probably heard of MFA (sometimes referred to as two-factor authentication (2FA), but if you haven’t set it up for your business, now’s the time (and this guide can help). It starts with understanding what MFA is and the types of authentication factors, and covers the tangible benefits it offers small businesses, including enhanced security, regulatory compliance, and bolstered customer trust. It also walks you through a step-by-step guide for implementing MFA, tackling common adoption challenges with practical solutions, and highlights best practices for maintaining robust MFA security.

Understanding Multi-Factor Authentication

You’ve likely heard of Multi-Factor Authentication (MFA), and if you’ve ever received a code from your bank to confirm a login attempt, or had to verify your identity when accessing your email from a new device, you’ve used it. MFA is a security measure that enhances the protection of online accounts and devices by requiring two or more proofs of identity before granting access. This method significantly bolsters security beyond traditional passwords by combining different types of evidence, or “factors,” making it much tougher for attackers to breach accounts. With MFA, even if one factor is compromised, unauthorized access is still blocked without the additional verification.

Think of MFA like a door that needs two keys to open. Even if a thief manages to steal one key, they still can’t get through the door without the second key. According to Microsoft, accounts are more than 99.9% less likely to be compromised if you use MFA. This statistic highlights the powerful impact MFA can have on enhancing your business’s security.

There are three main types of authentication factors used in MFA:

  1. Something You Know: This one you definitely have experience with. It’s called ‘something you know’ because it’s usually stored in your memory (and hopefully not on a sticky note attacked to your computer monitor!). It’s the password for your login, or the PIN on your ATM card.
    Sometimes websites will use multiple implementations of ‘something you know’ for security. If you’ve ever had to come up with answers to security questions to unlock your account, this is another example of ‘something you know’.
  2. Something You Have: This factor involves something physical you possess, such as a security token, a smartphone app that generates time-based codes, or a smart card. For example, a bank might send a code to your phone that you need to enter to log in to your online banking account.
    Often, these types of MFA are implemented with a time-based rotation. For example, that code your bank sends you to log in may only be good for 15 minutes. This is to protect you from theft – if someone steals your phone and looks at your recent messages, you wouldn’t want them to be able to log in with that code. So typically these security measures have a very short life, on the oder of seconds or minutes.
  3. Something You Are: This refers to biometrics, which could be your fingerprint, facial recognition, or voice pattern. Biometric factors are unique to you and are becoming more common in everyday devices like smartphones.
    If you’ve ever used FaceID to unlock your iPhone, or unlocked your Android phone with a fingerprint, you’ve used this type of security.

If you think about it from a “frustrating the hackers” perspective, MFA makes a lot of sense. If a hacker steals the password to your bank, they won’t be able to get in and clean out your accounts unless they also managed to steal your phone and get the second security code. No security measure is perfect and there’s always risk, but adding layers of security makes it that much harder for you to be hacked. Implementing MFA is a straightforward and effective way to significantly upgrade your cybersecurity posture and protect your business from potential threats.

The Benefits of Implementing MFA for Small Businesses

Implementing Multi-Factor Authentication (MFA) can significantly strengthen a small business’s cybersecurity framework. This added layer of security does more than just safeguard against unauthorized access; it positions the business for greater resilience against a variety of cyber threats, assists in meeting regulatory standards, and bolsters customer confidence.

Enhanced Security

MFA introduces an additional verification step that must be completed before access is granted, making it significantly harder for attackers to succeed even if they have stolen a password. According to Verizon’s 2023 Data Breach Investigations Report, 61% of breaches involved credential data. MFA can protect against these common threats, such as phishing and password attacks, by ensuring that a password alone is not enough to breach an account. For small businesses, where resources may be limited, MFA offers a cost-effective way to enhance security defenses without the need for extensive infrastructure.

Regulatory Compliance

For small businesses operating in sectors that handle sensitive information, such as healthcare or finance, MFA can also play a crucial role in achieving regulatory compliance. Many regulations, including the Health Insurance Portability and Accountability Act (HIPAA) in the U.S., mandate strong access control measures for protecting personal data. Implementing MFA can help small businesses meet these requirements, potentially avoiding costly fines and penalties associated with non-compliance. This is not just about following the rules—it’s about actively protecting the integrity and privacy of customer and patient information.

Customer Trust

In an era where data breaches are frequently in the news, customers are making your business’ security posture a key part of their buying decision.. By adopting MFA, you can demonstrate a commitment to data security, thereby increasing customer trust. A 2022 survey by Ping Identity found that 63% of consumers are more likely to trust companies that require MFA (up 9% from their 2021 survey!). This trust is invaluable, as it can lead to higher customer retention rates and attract new customers who value security.

Oh, there’s a fourth reason to get started implementing MFA. It’s going to be required for most cyber insurance policies, and if you can’t show evidence of your implementation you’re not likely to get the best rates. If you weren’t already convinced, do it for your bank account.

For more information on factors that go into cyber insurance and how to position yourself to negotiate for the best rates, see our comprehensive guide on cyber insurance pre-qualification.

Implementing MFA: A Step-by-Step Guide

Like any business process implementation, MFA takes effort, planning, and follow-up. Understanding the potential challenges and knowing how to address them can make the implementation smoother and more effective.

Choosing an MFA Solution

The good news is, there are free tools like Google Authenticator that support MFA across various websites and are relatively easy to implement, The bad news is, these tools don’t offer much in the way of centralized administration, reporting, and support. If you have a small, tech-savvy staff, you might be fine with one of these solutions. But if you are worried about compliance or need implementation support, you might consider one of these other options:

  1. Microsoft Authenticator: Offers seamless integration for organizations using Microsoft 365, providing a range of authentication methods including push notifications, one-time passcodes, and biometrics.
  2. Duo Security (now part of Cisco): Provides a wide range of authentication methods, including push notifications and U2F, and offers additional features for device health inspection and adaptive authentication.
  3. Authy: Known for its user-friendly interface and ability to sync tokens across multiple devices, making it convenient for users who switch between phone, tablet, and desktop.
  4. Okta Verify: Part of the Okta Identity Cloud, this solution offers flexible and scalable MFA options tailored for enterprise environments, including push notifications and verification through SMS or email.
  5. RSA SecurID: A long-standing player in the security field, RSA offers hardware tokens and a software-based authenticator for secure access to networks and applications.
  6. LastPass Authenticator: While LastPass is best known for its password management, it also offers a straightforward authenticator app that provides push notifications, TOTPs, and SMS codes for secure login.

Each of these solutions has unique features and advantages (and costs!) so you will want to evaluate a few of them to see which is best for your business.

Deployment Strategies

As you saw in the last section, there are a lot of options in this space, so unfortunately we can’t offer a detailed deployment walkthrough for each MFA solution. At a high-level though, deployment follows the same set of steps:

  • Start by setting up the chosen MFA solution, ensuring it integrates with your current systems.
  • Next, enroll users by registering their devices or accounts for MFA. This process may involve downloading an app, such as Google Authenticator, or setting up hardware tokens.
  • Once you your users registered, GENERATE BACKUP CODES AND STORE THEM SOMEWHERE SAFE! It’s almost certain that some of your users will find themselves locked out at some point, because they lost their phone or security token or some other technical issue. Backup codes will get you over the worst of these.
  • Lastly, educate your staff about using MFA. Provide clear instructions and training sessions to ensure everyone understands how to authenticate their logins properly. Lots of IT implementations fail not because the technology didn’t work, but because staff didn’t know how to use it. So for every hour you spend on the technology implementation, expect to spend five on education and support.

Common Challenges and Solutions

Speaking of education and support, like any process change that involved technology it can come with a set of challenges. Here are some common issues and strategies for addressing them:

User Resistance

Resistance to adopting MFA often comes from inconvenience or misunderstanding about its importance. Here are specific examples of user resistance and how to address them:

  • Perceived Inconvenience: It’s hard to argue that needing to enter two things to log in when you previously just needed a password is easier for users. But not all MFA is difficult to use. Some tools can be integrated with the smartphone your users already have. These tools can send notifications that can be approved with a single tap, or integrate with biometrics like FaceID.
  • Confusion Over Setup and Use: All process rollouts are challenging until they become part of your staff’s routine. Make yourself or your IT team available to help. Reach out to staff proactively, because the most frustrated users might be the ones who give up rather than complain. A trusted cybersecurity partner like Arch Access can provide additional support and recommendations.

Technical Issues

On the technical side, you might run into issues of compatibility between MFA platforms and other technology solutions. But more commonly you will see loss of access due to device changes or failures as your most common technical issue. Here’s a more detailed breakdown:

  • Compatibility Issues with Legacy Systems: If you’ve got older laptops out there you might run into challenges with them. And as convenient as they are, FaceID and fingerprint sign-in have only been around for a few years, so if your staff have older phones they might be shut our of your MFA solution.
  • Loss of the Authentication Device: Death, taxes, and people losing their phone. You can count on all of them eventually. Earlier we recommended generatng backup codes and storing them somewhere safe. This is when that will come in handy. You’ll also want to establish a process for quickly revoking access from lost devices and re-enrolling new ones.
  • Network or Connectivity Problems: Sometimes, users might not receive an MFA prompt if there are network issues, or if they are in an area with poor internet service. This is even more likely in companies that support work-from-home, because the stability of a person’s Internet connection is out of your control. To address this, consider offering fallback MFA methods that don’t rely on an internet connection, such as SMS codes (with the caveat that these have slightly lower security) or hardware tokens.

Despite the complaints you’re sure to hear, MFA is worthwhile. Whichever tool you choose, the important thing is that you’re taking a significant step toward securing your business against cyber threats.


We’ve covered a lot about Multi-Factor Authentication in this article. You’ve learned what MFA is, the undeniable benefits it brings to the table, like enhanced protection, compliance ease, and a boost in customer confidence. You’ve got a road roadmap for implementing MFA, overcoming common hurdles, and ensuring your MFA remains airtight against evolving cyber threats.

Adopting MFA is a critical step, but it’s just part of the journey toward cybersecurity protection that doesn’t keep you up at night, worrying. If this seems like a lot, remember that you don’t have to walk it alone. Partners like Arch Access are here to guide you through implementing MFA and beyond, ensuring your cybersecurity measures meet the mark, not just for safeguarding your operations but also for meeting cyber insurance requirements.

Speaking of cyber insurance, if you’re considering MFA as a step towards securing a policy, our detailed guide on “Everything You Need to Know and Do to Pre-Qualify for Cyber Insurance in 2024” offers invaluable insights into MFA and other prerequisites. Visit Arch Access’ comprehensive guide to pre-qualifying for cyber insurance to ensure your business is both protected from cyber threats and in a position to negotiate for the best cyber insurance rates.