Passkeys in Regulated Products: Usability vs Control is a False Tradeoff

Security should not feel heavy to be effective.

In regulated products, authentication is often treated like a forced tradeoff:

• more control means more friction
• better usability means less security
• simpler UX means weaker enforcement

That way of thinking is a holdover from the password era, and it no longer reflects what’s possible.

Passkeys already prove that you can make login both easier and more secure at the same time. They remove passwords entirely, eliminate a huge amount of phishing risk, and speed up authentication dramatically. Still, many regulated teams hesitate to rely on passkeys fully, because they worry that most passkey implementations were designed for consumer convenience rather than enterprise-level control.

That concern is reasonable, but the real story is more nuanced.

With the right design choices, especially device binding, passkeys can give regulated teams the operational clarity they need without adding friction for users. In many cases, they actually reduce friction because they remove ambiguity.

Why regulated teams hesitate on passkeys

Most teams operating in regulated environments have a very specific set of responsibilities. They are not just building a login experience. They are protecting accounts, meeting compliance requirements, and preparing for audits and incident reviews. That means they care deeply about things like:

• knowing which device accessed an account
• limiting unauthorized device proliferation
• enforcing step-up and recovery rules
• being able to explain access decisions to auditors
• reducing phishing and account takeover risk

Passkeys do extremely well against phishing. The hesitation usually comes from how early passkey implementations handled portability and syncing. Many passkey models prioritize easy cross-device availability, which makes sense for consumer apps, but it can create discomfort when your job is to answer questions like “how did this device get access?” or “how can we prove this device was explicitly trusted?”

When you are accountable to regulators and auditors, ambiguity feels risky even if the underlying cryptography is strong.

This is how teams end up with the wrong conclusion: secure passkeys must feel rigid.

They do not.

The regulatory reality: control is about clarity, not friction

Most authentication-related regulatory requirements do not prescribe a specific user experience. They care about outcomes:

• strong customer authentication
• reduced reliance on weak factors
• clear access controls
• demonstrable risk management
• auditable processes

Regulators have been increasingly vocal about the risks of OTP-based authentication because of phishing and social engineering. And industry bodies increasingly treat phishing-resistant authentication as a best practice.

Passkeys satisfy that direction at a cryptographic level.

What device binding does is turn that cryptographic strength into operational clarity.

How device binding actually improves usability

Device binding is often misunderstood as “locking users down.” In practice, it does the opposite. It makes the system easier to understand.

When passkeys are device-bound:

• users know which devices are trusted
• login behavior becomes consistent
• recovery is easier to explain
• access feels predictable instead of surprising

Predictability is one of the biggest drivers of perceived usability. Users are almost always more frustrated by uncertainty than by rules. If the system behaves in ways they don’t understand, they assume something is wrong. If the system behaves consistently, they accept it quickly.

The mental model is the difference

Without device binding, users tend to ask questions like:

• where is my passkey stored?
• why does it work on one device but not another?
• did something sync that I didn’t approve?
• what happens if this device is lost?

Those questions are usability problems, not security problems, but they create friction and support burden.

With device binding, the mental model becomes simple:

• this device is trusted
• new devices must be added intentionally
• old devices can be removed
• access is controlled, visible, and explainable

That clarity strengthens both trust and usability.

Control does not require constant challenges

Another common misconception is that stronger control means users should be challenged more often.

In reality, device-bound passkeys can allow teams to reduce challenges because the device itself becomes a strong trust anchor. If a user is signing in from an already trusted device, the team can allow:

• local device unlock for routine access
• fewer repeated prompts
• step-up only when risk actually increases
• removal of many OTP-based interruptions entirely

Google has publicly noted that passkeys are not only more secure but also faster than password and OTP flows. That matters because speed is a usability advantage regulators do not object to.

The result is fewer interruptions for legitimate users and stronger protection against attackers.

Why device binding works better for audits and risk reviews

Auditors do not want complex explanations. They want clean, deterministic stories they can follow and validate.

Device-bound passkeys create exactly the type of evidence that auditors prefer:

• clear device registration events
• explicit device revocation actions
• deterministic access paths
• consistent enforcement logic

It becomes much easier to answer questions like:

• how many devices can access this account?
• how are new devices approved?
• how is access removed?
• how do you prevent unauthorized reuse?

Cloud-synced or user-bound-only models can still be secure, but they often create a harder documentation problem because the path from “user account” to “device access” is not as directly controllable and visible.

In regulated environments, explainability is a form of control.

The UX myth: regulated users expect friction

There’s a long-standing belief that users of regulated products expect uncomfortable experiences. The data does not support this.

Regulated products compete on experience just as much as unregulated ones. Users do not accept friction because compliance exists. They accept it until someone offers a better alternative.

The best outcome is not “secure but painful.”

It is “secure and boring.”

Boring means:

• predictable
• consistent
• fast
• understandable

Device-bound passkeys help teams build boring security, and that is what wins.

Designing passkeys that satisfy both usability and control

If you want passkeys to feel effortless while meeting regulated requirements, the design work matters. Teams that get this right tend to focus on a few principles:

• explain device binding clearly at enrollment
• guide users through new-device registration with intent
• avoid silent sync or unexplained behavior
• make device management visible but simple
• default to passkeys for routine access
• reserve step-up for real risk signals, not routine behavior

None of this requires sacrificing security. Most of it reduces friction.

How to measure success in regulated environments

To evaluate whether the system is actually working, you need metrics that capture both usability and control:

• percentage of sign-ins completed with passkeys
• device-bound passkey usage rate
• new-device registration completion rate
• fallback frequency after device change
• authentication-related fraud or incident rate
• support tickets related to login confusion

If adoption increases and confusion drops while risk indicators remain stable or improve, you are not trading security for usability. You are improving both.

Closing thought

The idea that regulated products must choose between usability and control is a holdover from the password era.

Passkeys already move authentication forward by removing passwords and reducing phishing risk. Device binding completes the picture by making access predictable, auditable, and easy to understand.

Security does not need to feel heavy to be effective. In many cases, the most secure systems are the ones users barely notice, because they simply work.

sources
https://fidoalliance.org/passkeys/
https://fidoalliance.org/passkey-adoption-doubles-in-2024-more-than-15-billion-online-accounts-can-leverage-passkeys/
https://www.ncsc.gov.uk/collection/phishing-scams/passkeys
https://blog.google/technology/safety-security/google-passkeys-update-april-2024/
https://www.microsoft.com/en-us/security/blog/2024/05/02/passkeys-and-the-future-of-authentication/

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