Risk-based authentication is a non-static authentication system which takes into account the profile of the agent requesting access to the system to determine the risk profile associated with that transaction. The risk profile is then used to determine the complexity of the challenge. Higher risk profiles leads to stronger challenges, whereas a static username/password may suffice for lower risk profiles. Risk based implementation allows the application to only challenge the user for additional credentials when the risk level is appropriate. "Machine authentication is often used in a risk based authentication set up. The machine authentication will run in the background and only ask the customer for additional authentication if the computer is not recognized. In a risk based authentication system, the institution decides if additional authentication is necessary. If the risk is deemed appropriate, enhanced authentication will be triggered, such as a one time password delivered via an out of band communication. Risk based authentication can also be used during the session to prompt for additional authentication when the customer performs a certain high risk transaction, such as a money transfer or an address change. Risk based authentication is very beneficial to the customer because additional steps are only required if something is out of the ordinary, such as the login attempt is from a new machine."

Benefits

1. Better UI
   User interface
   The user interface, in the industrial design field of human–machine interaction, is the space where interaction between humans and machines occurs. The goal of interaction between a human and a machine at the user interface is effective operation and control of the machine, and feedback from the...
   
    and UX
   User experience
   User experience is the way a person feels about using a product, system or service. User experience highlights the experiential, affective, meaningful and valuable aspects of human-computer interaction and product ownership, but it also includes a person’s perceptions of the practical aspects such...
   
    compared to blanket 2-Factor authentication
2. Easier subsequent login process, thus reducing the chances of the user leaving the session open unnecessarily.

Criticism

1. The system that computes the risk profile has to be diligently maintained and updated as new threat vectors emerge. Improper configuration
   Configuration
   The term configuration has several meanings.In computing it may refer to:* Computer configuration or system configuration* Configure is the output of Autotools and used to detect system configuration...
   
    may lead to unauthorized access.
2. The user's connection profile (e.g. IP Geolocation
   Geolocation software
   In computing, geolocation software is used to deduce the geolocation of another party. For example, on the Internet, one geolocation approach is to identify the subject party's IP address, then determine what country , organization, or user the IP address has been assigned to, and finally,...
   
   , connection type, keystroke dynamics
   Keystroke dynamics
   Keystroke dynamics, or typing dynamics, is the detailed timing information that describes exactly when each key was pressed and when it was released as a person is typing at a computer keyboard.- Science of Keystroke Dynamics :...
   
   , user behaviour) has to be detected and used to compute the risk profile. Lack of proper detection may lead to unauthorized access.