FIDO passkeys and phishing-resistant authentication are resetting IAM

At a glance

What this is: This is OneSpan's analysis of how FIDO passkeys, phishing-resistant authentication, and AI-driven fraud are reshaping IAM away from password-centric and easily proxied login patterns.

Why it matters: It matters because IAM teams now need authentication that resists interception and real-time relay attacks without creating friction that drives users and business units back to weaker access paths.

Context

Phishing-resistant authentication is becoming an identity design requirement rather than a nice-to-have control. The article argues that traditional authentication patterns, including many MFA deployments, no longer hold up against proxy phishing, real-time adversary-in-the-middle attacks, and scaled social engineering.

For IAM practitioners, the real issue is not whether passwordless login is available, but whether the organisation can move to stronger authenticators while preserving usable access for staff, customers, and high-assurance journeys. The article places FIDO passkeys at the centre of that shift because they reduce shared-secret exposure and support broader authentication modernisation.

Key questions

Q: How should security teams replace MFA flows that attackers can proxy in real time?

A: Security teams should prioritise phishing-resistant authentication for the accounts and transactions that would be most damaging if relayed or replayed. That means moving away from shared-secret or push-only patterns and toward authenticators bound to the device and the relying party. The goal is to make stolen login interaction useless, not merely harder to obtain.

Q: Why do passkeys reduce phishing risk compared with passwords?

A: Passkeys are bound to the original website and use cryptographic proof instead of a reusable secret. That means a fake site cannot harvest a password and replay it later. The phishing benefit is real, but it only holds if the organisation also limits weak fallback methods that attackers can abuse instead.

Q: What signs show that an authentication programme is still too easy to relay?

A: Look for login methods that still succeed after a user is redirected through a proxy, repeated prompts that do not bind to the target site, and frequent help-desk recovery after authentication failures. Those signals often mean the control is protecting the login event, but not the session trust boundary. If the attacker can carry the proof forward, the programme is still relayable.

Q: What changes when identity is used to govern both users and AI-enabled access paths?

A: The programme has to govern more than human sign-in. It must decide how trust is asserted for systems, automations, and AI-mediated actions that now consume identity assertions and data access rights. That expands identity from access entry to access orchestration, which means policy, assurance, and monitoring all need to follow the same trust boundary.

Technical breakdown

Why MFA is failing against real-time phishing proxies

Modern phishing kits do more than steal passwords. They can relay credentials and session material through real-time proxy infrastructure, which means a user can complete MFA and still hand control to the attacker. That changes the threat from simple credential theft to authentication relay, where the adversary sits in the middle of the session and captures what the protocol still trusts. In practice, the issue is not only the factor count. It is whether the authenticator is bound to the device, the origin, and the intended relying party. That is why phishing resistance matters more than adding another prompt. Practical implication: treat relay-resistant authentication as the design target, not MFA volume.

Practical implication: Prioritise authenticators that are bound to the device and origin, not factors that can be relayed through a proxy.

How FIDO passkeys change the authentication trust model

Passkeys replace shared secrets with public-key credentials, which means the server stores a public key and the private key never leaves the user device or synced credential store. The login flow is then signed proof of possession, not a reusable secret that can be phished and replayed elsewhere. For identity teams, this is a structural shift because the authenticator is tied to cryptography and relying-party context rather than human memory or reusable tokens. The article also distinguishes between synchronisable passkeys and hardware security keys, with hardware keys offering higher assurance for sensitive use cases. Practical implication: match authenticator type to the assurance level of the access path.

Practical implication: Use passkeys for broad adoption, but reserve hardware-bound authenticators for privileged and high-risk access.

Why identity and AI are now coupled control problems

The article frames AI in three identity-related roles: improving detection and adaptive access, strengthening defences against deepfake-style fraud, and securing AI systems themselves through access control. That matters because the same identity layer that authenticates humans increasingly governs data access, model access, and agent access. If the organisation treats authentication only as a user login problem, it misses the growing need to control who or what can invoke digital services and consume sensitive data. The governance question is no longer isolated to workforce sign-in. It extends to whether identity can mediate trust between humans, systems, and AI-enabled processes. Practical implication: align identity policy with both user access and AI-mediated access paths.

Practical implication: Extend identity governance to AI-enabled workflows and service access, not just human login journeys.

Threat narrative

Attacker objective: The attacker aims to obtain trusted access that survives the login event and can be used for account takeover, fraud, or broader access expansion.

1. Entry begins when the attacker uses phishing, a proxy kit, or an AI-assisted lure to capture login interaction from the victim.
2. Credential access succeeds when the user completes an authentication flow that can be relayed or reused before the session is fully established.
3. Escalation follows when the attacker rides the authenticated session into higher-value applications, help-desk workflows, or downstream access paths.
4. Impact is achieved when the stolen session or trusted access path is used for fraud, account takeover, data access, or further phishing.

Breaches seen in the wild

• CoPhish OAuth phishing via Copilot Studio: Datadog showed Copilot Studio agents on a Microsoft domain can front OAuth consent phishing and forward stolen tokens; no victims reported.

Read and download The State of NHI & AI Agent Breach Report 2026, covering 200+ breaches impacting Non-Human Identities including AI Agents.

NHI Mgmt Group analysis

Phishing resistance is now an authentication baseline, not an advanced option. Once adversaries can relay sessions in real time, the question is no longer how many factors a programme uses but whether the authenticator can be intercepted at all. Shared-secret and push-based patterns still leave a relay window that attackers can exploit. Practitioners should treat phishing resistance as the minimum standard for any access path that matters.

Passkeys reset the authentication problem because they remove the reusable secret from the user workflow. That does not eliminate identity risk, but it changes the attack surface from human memory and shared credentials to device-bound cryptographic proof. For IAM teams, this is the clearest path away from password-centric design without forcing users into a worse experience.

Identity and AI are converging into the same governance plane. The article correctly places AI on both sides of the control problem: as an attack amplifier and as a system that must itself be authorised. That means authentication strategy can no longer be separated from AI governance, because the same identity controls now shape both human access and machine-driven access decisions.

High-assurance access will increasingly be defined by context, not a single factor. Hardware-bound keys, synced passkeys, adaptive checks, and step-up controls each have a role, but they are not interchangeable. The governance issue is assurance selection, not one-size-fits-all deployment, and practitioners need to map authenticators to the sensitivity of the transaction.

Phishing-resistant authentication exposes the weakness of programmes that still optimise for convenience over trust. The market signal here is clear: organisations will be pushed to modernise access while avoiding user friction that drives workarounds. IAM teams that do not set an adoption path for passkeys now will keep paying the hidden cost of compensating controls, help-desk load, and replayable authentication.

What this signals

Phishing-resistant access will become the default expectation for sensitive identity journeys. Organisations that keep treating MFA as the end state will continue to absorb the cost of proxy phishing, support overhead, and user workarounds. The practical signal is to build a staged adoption path for passkeys and stronger authenticators now, before attackers make the old model operationally untenable.

Passkey rollout is as much a governance problem as a technical one. Teams need to decide which journeys can use synced credentials and which require hardware-backed assurance, because the wrong default can either weaken protection or stall adoption. The programme that wins here will be the one that aligns assurance level, user experience, and exception handling in a single identity policy.

For practitioners

• Prioritise phishing-resistant authenticators for high-risk journeys Move privileged staff, customer, and sensitive transaction flows to phishing-resistant authentication first, before broad rollout elsewhere. Start with journeys where credential relay, session hijack, or support-driven social engineering would create outsized impact.
• Separate passkey strategy by assurance level Use synced passkeys where usability is the main constraint, and reserve hardware-bound authenticators for privileged access, regulated workflows, and other high-assurance use cases.
• Map AI-enabled access paths into identity governance Review where AI systems, automation, or adaptive decisioning are consuming identity assertions, because those paths now sit inside the same trust boundary as human authentication.
• Reduce reliance on relayable authentication patterns Identify legacy MFA flows that can be proxied, repeated, or socially engineered, then replace them with controls that bind the credential to the device and relying party.

Key takeaways

• Passkeys and phishing-resistant authentication shift IAM away from credentials that can be intercepted, relayed, and replayed during live attacks.
• The article's central message is that stronger authentication must be usable enough to replace legacy MFA rather than sit beside it as an exception.
• IAM teams should separate high-assurance access from everyday access and align authenticators to the risk of the transaction.

Key terms

• Phishing-Resistant Authentication: Phishing-resistant authentication proves identity without relying on a user to approve a prompt or reveal a reusable secret. It typically binds access to a device, key, or cryptographic proof that an attacker cannot easily reuse or coerce. This approach reduces reliance on human judgment at login time.
• Passkey: A passkey is a passwordless credential based on public key cryptography. A private key stays on the user’s device, while a public key is stored by the service. During login, the device signs a challenge after local unlock, which reduces phishing and eliminates shared secret reuse.
• Phishing proxy: A phishing proxy is a fake login site or relay service that mimics a real authentication page and forwards the victim’s credentials and session data to the genuine service. It defeats controls that rely on the user entering reusable secrets into a trusted-looking prompt.
• High-assurance access: Access paths that require stronger proof of identity because the business, regulatory, or fraud impact of compromise is high. In this context, assurance should be matched to the transaction and may require hardware-bound authenticators, tighter policy, or additional monitoring.

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