They should prioritise the highest-risk paths first, but passwordless matters because it removes the reusable password from the flow rather than layering another factor on top. If the environment still depends on phishable methods for critical applications, more MFA coverage alone may improve appearance without materially reducing takeover risk.
Why passwordless usually wins on the highest-risk paths
For financial firms, the real question is not whether MFA is useful, but whether adding more mfa coverage materially reduces account takeover on the paths that matter most. Passwordless shifts the control point by removing the reusable password from the flow, which closes off credential stuffing, password reuse and many phishing relay patterns that still defeat traditional mfa.
That matters most where sign-in protects payments, trading, admin consoles, VPN, help desk resets and other high-impact systems. If those paths still accept phishable factors, expanding MFA can improve coverage numbers without meaningfully changing takeover risk.
Where the authentication method is phishing-resistant, the firm is protecting the login flow itself rather than relying on the hope that attackers will stop at the second factor. A useful reference point is NIST SP 800-63 Digital Identity Guidelines, which treats phishing-resistant authenticators as materially stronger than reusable secrets plus a second step.
Why broader MFA coverage still has value
Expanding MFA is not wasted effort. It reduces exposure where passwordless is not yet available, where legacy apps still need step-up authentication, and where user populations or devices cannot support modern authenticators. In a large financial estate, those gaps are real and often include vendor portals, break-glass paths, and externally hosted tools.
The limitation is that conventional MFA is uneven in strength. Push approvals, SMS codes and one-time passwords raise the bar, but they can still be bypassed through relay, fatigue, session theft or help desk abuse. If those mechanisms remain in place for critical access, the firm may improve policy compliance while leaving the most attractive attack paths open. NHIMG’s MFA Guide is useful here because it separates merely present MFA from phishing-resistant authentication.
In practice, this means MFA expansion should be treated as a coverage and continuity measure, not the end state for high-risk identities. Passwordless and phishing-resistant MFA are better compared as controls for the same risk, not as branding variants of the same protection.
How financial firms should sequence the rollout
The strongest sequencing is to start with the applications and user groups where compromise would create the largest blast radius, then move outward. That usually means privileged users, remote access, finance operations, engineering and support paths before lower-impact employee access.
- Prioritise internet-facing and remote-access logins before internal convenience logins.
- Move privileged and high-friction users first, because their compromise costs most.
- Keep MFA coverage expanding in parallel for legacy applications that cannot yet go passwordless.
- Test recovery, device replacement and break-glass procedures before broad rollout.
For the implementation detail that matters most, the control goal is not simply “more factors”, but fewer reusable secrets and fewer ways to authenticate with phishable methods. NHIMG’s Passwordless and Passkeys Guide is the clearest path for understanding how passkeys and device-bound authenticators change that risk profile.
Risk and Threat Considerations
Traditional MFA can fail when the attacker obtains the password, coerces the second factor, or steals the session after authentication. In finance, that is especially dangerous because a single successful login can expose cash movement, customer data, trading controls or admin tooling.
Failure mechanism: Phishable MFA methods, reusable passwords and weak recovery paths let attackers turn one compromised credential into durable access, especially when help desk workflows or session tokens become the real target.
Impact: The firm may believe it has improved assurance while still leaving takeover, fraud and lateral movement paths intact, which is why passwordless is often the better risk-reduction step for critical access.
Standards & Framework Alignment
This section maps relevant standards and security frameworks to the operational risks and controls described in this guidance.
OWASP Non-Human Identity Top 10 addresses the attack surface, NIST SP 800-63, CIS Controls v8 and NIST CSF 2.0 set the technical controls, and ISO/IEC 27001:2022 defines the regulatory obligations.
| Framework | Control / Reference | Relevance |
|---|---|---|
| NIST SP 800-63 | Digital Identity Guidelines | Phishing-resistant authenticators are central to the passwordless vs MFA decision. |
| Recommendation — Use phishing-resistant authenticators for critical access instead of relying on reusable passwords and weaker second factors. | ||
| OWASP Non-Human Identity Top 10 | NHI-04 — Insecure Authentication | Passwordless and MFA coverage both address insecure authentication paths and takeover risk. |
| Recommendation — Replace phishable login methods with stronger, phishing-resistant authentication. | ||
| CIS Controls v8 | CIS-5 — Account Management | Prioritisation depends on which accounts and access paths are highest risk and most exposed. |
| Recommendation — Target the highest-risk accounts and access paths first, then expand control coverage outward. | ||
| NIST CSF 2.0 | PR.AA-05 — Identity Management, Authentication, and Access Control | The topic is fundamentally about strengthening authentication and access control outcomes. |
| Recommendation — Implement stronger authentication for critical access paths and reduce dependence on reusable credentials. | ||
| ISO/IEC 27001:2022 | A.5.15 — Access control | The question concerns how to reduce access risk across financial sign-in paths. |
| Recommendation — Apply access-control policy that favors stronger, phishing-resistant authentication for sensitive systems. | ||
Practitioner Guidance
What to prioritise: Start with the workflows where a single compromised sign-in would be most damaging, then measure how much of that estate still depends on phishable authentication. If a critical application still allows password plus push or OTP, treat that as a higher priority than expanding MFA to low-impact populations.
What to verify: Confirm that the deployment is genuinely phishing-resistant, not just “MFA-enabled”. Check whether recovery, enrollment and fallback paths can be abused to reintroduce password dependence or bypass the stronger factor.
Practitioner takeaway: The right decision is usually not passwordless versus MFA in the abstract, but passwordless for the highest-risk paths first, while using MFA expansion to close residual legacy gaps.
Related resources from NHI Mgmt Group
- When should financial institutions prioritise online acquisition over traditional direct mail?
- When should organisations prioritise open APIs over keeping financial data inside traditional bank channels?
- When should firms prioritise regulator specific compliance over local enactments in a regulated financial model?
- What is the difference between passwordless authentication and traditional MFA?