Microsoft Introduces Authentication Strength for Conditional Access Policies

Allows CA Policies to Differentiate Between MFA Methods

Building off yesterday’s discussion about Azure AD authentication methods and the discussion at the TEC 2022 conference about the need to do better with MFA, Microsoft released an important improvement to MFA effectiveness this week by enhancing conditional access policies with authentication strength for MFA challenges.

Last year, Microsoft added number matching and additional context to the Authenticator app to help address the issue of MFA fatigue. This is when people mindlessly respond to MFA prompts without registering what they’re doing, something that attackers can exploit to compromise user accounts. However, even if people pay attention to MFA prompts, there’s no doubt that SMS-based challenges deliver weaker protection than other methods.

Expanding Conditional Access Policies

Conditional access (CA) policies operate by applying rules to connections to determine if a user can connect to the requested resource. For example, can they access an Office 365 application like OWA. Combined with authentication policies, CA policies can severely limit the ability of an attacker to compromise user accounts and stop incidents like the OAuth exploit against Exchange Online recently reported by the Microsoft 365 Defender Research Team.

CA policies have been able to insist that accounts use MFA for many years. Up to now, one kind of MFA has been as good as another. Microsoft now differentiates the strength of authentication gained through the available methods (Figure 1).

Azure AD authentication methods (source: Microsoft)
Figure 1: Azure AD authentication methods (source: Microsoft)

SMS is graded at medium level and its usability is high because most people have smartphones. I’m not quite sure why it shows up as medium availability. Microsoft defines this as “an indication of the user being able to use the authentication method, not of the service availability in Azure AD”. Most people I know are very able to use SMS given that it’s a messaging capability in general use since the mid-1990s.

In any case, Microsoft acknowledges the problems with SMS when it responds to an authentication challenge, and they want to encourage people to use more secure methods. In reality, this means that Microsoft wants people to use their Authenticator app, Windows Hello, or FIDO2 key.

Using Authentication Strength in CA Policies

To test the new capability, I created a CA policy to control access to Office 365 and set the policy to grant access based on the authentication strength of the user connection. The default strength is multifactor authentication, meaning any of the traditional methods like SMS will satisfy the condition. I selected the next step up, requiring the use of passwordless MFA (Figure 2).

electing authentication strength in a Conditional Access policy
Figure 2: Selecting authentication strength in a Conditional Access policy

The strongest method is phishing-resistant multifactor authentication. Using a FIDO2 key satisfies this requirement. At TEC 2022, Alex Weinert, Microsoft’s VP for Identity Security, said that the Authenticator app will meet this requirement “soon.”

Note the warning about cross-tenant access settings. These are the Azure AD Direct Connect policies that underpin Teams shared channels. A cross-tenant access policy setting controls if your tenant accepts the multifactor authentication performed by the home tenants of external users who participate in shared channels in your tenant. You should accept those claims to allow external users to continue to collaborate even if they don’t measure up to the authentication strength required for tenant users.

Effect of Authentication Strength

The effectiveness of authentication strength was immediate. Users configured to use the authenticator app continued have access while those who used SMS were allowed to connect and told to select a new authentication method (Figure 3).

A user with SMS-based MFA is invited to upgrade their authentication strength
Figure 3: A user with SMS-based MFA is invited to upgrade their authentication strength

In Figure 3, Azure AD shows that a FIDO2 key is the only available method. This was because the user account had the authenticator method but it needed to be fully configured. Once this was done, the user could connect successfully.

Like any other authentication failure due to a CA policy, details of the failed connection are in the Azure AD sign-in log (Figure 4).

Azure AD audit log failure event due to authentication strength failing a CA policy test
Figure 4: Azure AD audit log failure event due to authentication strength failing a CA policy test

Heading to the Sunny Highlands of Secure MFA

It will be interesting to see how many organizations try to move users away from SMS-based MFA to more secure authentication methods. Just because Microsoft wants this to happen is no reason why it will in the real world. Some customers will love the new capability and rush to embrace it, but I suspect that the real challenge that needs to be fought first is to increase the current percentage of Azure AD accounts protected by MFA from 26.64% to well north of 50%. After killing basic password authentication and pausing for a breath, moving to really secure MFA might be the next hill to climb.

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4 Replies to “Microsoft Introduces Authentication Strength for Conditional Access Policies”

  1. SMS might be considered as medium availability as mobile phones are not allowed in many commercial / industrial environments. E.g. In manufacturing clean rooms, personal phones have the potential to contaminate hands and gloves after cleaning and gowning up. (as are watches, jewellery, wallets; ruling out a number of similar tokens, or resulting in them having to be stored within the area)
    Microsoft’s limited MFA alternatives have been a problem.

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