Password file authentication vs OS authentication in Oracle

It's possible to have the operating system check if a user may log on a database or not. The idea is, if the user already knew the password to log on to the operating system, he doesn't have to know a password on the database. Such a user is created like so:

create user ops$<os_username> identified externally

Note, the string ops$ must be identical to the value of os_authent_prefix.