Risk-based authentication: only part of the picture
A recent article in ISSA Journal describes risk-based authentication, a technique that adjusts the credentials an individual must provide to verify his identity based on the threat that the party attempting to authenticate is an imposter. The author describes many bases on which the risk of impersonation is gauged, including the weekday, time and location from which the party is authenticating, whether the party frequently connects from this location, the endpoint device the party uses to connect (i.e., a computer that the user has registered with the authenticator), etc. Anomalies in any of these and other criteria cause the authenticator to add challenges to the baseline authentication method. The added challenges are designed to increase confidence that the party is whom he claims to be, i.e., personal questions that only the authorized party in theory can answer. In principle, the more this session attempt deviates from the user's norm, the higher the risk, and hence the user must provide greater reassurance to the authenticator. A breaking point can be implemented: too many anomalies and the party will be blocked from connecting.
I like the concept, but it's too narrow. In addition to authentication, I'd like to see authorization be risk-based as well. There are many circumstances where the risk of disclosure, potential for coercion, etc. might be sufficiently high to warrant an "access denied from your location, at this time" action. Prior to authentication, the risk of accessing sensitive information from the endpoint device used should play a factor; for example, while an employee might be permitted access to email from a public computer, it may be appropriate to deny access to a database from that computer.
I described a "continuum of trust" at several seminars that complements this thinking. The actions involved in asserting trust (assessing risk) are illustrated below:

Using the risk-based strategy, begin by determining the risk associated with the device, location, day and time, etc. If the risk is acceptable, allow the user to authenticate, using the risk analysis described earlier. Continue by enforcing access controls on data requested, again according to risk.
The last component, exit control, is not risk assessment, but risk mitigation. Make certain that nothing that would disclose the user's credentials, activities, and of course the data accessed remain on the endpoint device before closing the session.
Archived at http://www.securityskeptic.com/arc20080401.htm#BlogID685
by Dave Piscitello