Multi-factor authentication enhances security by requiring users to provide two or more verification factors to access a system. This method reduces the risk of unauthorized access, as even if one factor, like a password, is compromised, the additional factors, such as biometrics or one-time codes, create another barrier. This approach is crucial for protecting sensitive information and is widely adopted in various platforms, including online banking and corporate networks, to minimize risks associated with identity theft and data breaches.