Software Tokens vs. Hardware Tokens: Protecting Your Organization’s Data

As we progress further into the digital age, hacking technology is only becoming more advanced. This means passwords are simply not secure enough to be used as a stand-alone means of authentication for your business and its customers. As the landscape of cybersecurity changes, you need to use two factor authentication (2FA) or even better, multi-factor authentication (MFA) to protect sensitive data online.

In addition to username and password authentication, your business should consider utilizing tokens for MFA and data security. But should you choose a software-based token (also called a ‘soft token’) or a hardware token (hard token)? We help you decide.

What is a token?

Tokens are used as an additional method of authentication to verify users’ identity or to allow them to access restricted data or networks. They can be implemented as an additional security step in order to provide greater protection for users and organizations.

Hardware tokens are physical devices, often in the form of a card, USB drive or key fob, such as an Arculus card or YubiKey. Software tokens, meanwhile, are not tangible objects, and often rely on apps which are installed on another device, such as a smartphone or desktop computer. Software tokens typically work by using a secure authenticator app or by generating a single-use login code or link.

Which is better for your business: Hardware or Software Tokens?

In short, hardware tokens are more secure than software tokens, and using them to authenticate your users will make your business and its data more secure

While a hacker may be able to break into your system remotely, it is difficult to hack into one that requires a physical token without the token itself being present. These tokens also do not store any confidential data. This means that even if they do get lost or stolen, they cannot be used to gain access to sensitive information.

How your business plans to deploy tokens can also dictate which form of token is better suited to your organization’s needs, with hardware tokens being particularly well suited to securing physical locations, such as offices, or highly sensitive financial data or personal identifiable information (PII). Hardware tokens are also more reliable as they do not require network connectivity or charging.

On the other hand, software tokens are often cheaper to implement on a large scale as they often only require users to download an app. If cost is your biggest motivator, then a software token may be better suited to your needs; however, this comes with the obvious downside of them being easier to hack or compromise, leaving your system vulnerable. While they can feel more convenient and streamlined, software tokens rely on having a network connection, which can cause issues with ease of login.

Our Verdict

So, are soft or hard tokens better for your business, and do you need one? You need to consider your budget, your use case, and the sensitivity of the information you are protecting. Put simply, the inclusion of any token is more secure than just the use a password alone.

Ask yourself: is it necessary for your business to use hard or soft tokens for MFA and data security, and why? If securing your data is your highest priority, hardware tokens provide a greater level of protection. If you are looking to significantly step up your security procedures and your business handles highly-secure information, then it is worth the investment.