Best AI for AdvisorsWhat is multi-factor authentication?
Abbreviation: MFA.
Short answer
Requiring a second proof of identity, such as an app code or security key, in addition to a password to log in.
Definition
Multi-factor authentication asks for something beyond a password: a code from an authenticator app, a push approval on your phone or a physical security key. It makes stolen passwords far less useful to an attacker.
It's often set at the identity-provider level and inherited by apps through single sign-on.
Why it matters for advisors
AI tools hold a lot of client data in one place: every meeting transcript, every uploaded document. An account takeover exposes all of it. MFA is one of the simplest protections against that.
Cybersecurity is a standing SEC exam priority, and the fiscal 2026 priorities mention access controls and account management among the areas of focus.
MFA matters more as AI tools connect to each other. One stolen password to an AI assistant that's connected to your CRM, email and document storage can expose all three. Require MFA, or SSO with MFA, on every AI tool that touches client data, and check it at your annual vendor review.
Example
A firm requires app-based MFA on every AI tool account and checks it quarterly in each tool's admin panel.
Watch out for
Text-message codes are better than nothing, but app-based codes or security keys resist phishing and SIM-swap attacks better.
Related terms
- Single sign-onLogging in to many business apps with one firm-managed account, so access can be granted and removed centrally.
- Encryption in transit and at restScrambling data so only authorized systems can read it, both while it moves over a network and while it's stored.
- DeepfakeAI-generated audio, video or images that convincingly imitate a real person, often used in fraud and impersonation.
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Sources
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