How Can Passkeys Truly Secure Fintech Companies?

Right at the beginning of 2023, Paypal came forward to announce that they have fallen prey to a serious security breach, exposing the private user information of over 35,000 Paypal users. Hackers used credential-stuffing techniques to break into user accounts and steal crucial user information such as user’s names, addresses, bank details and social security numbers. Such massive attacks can not only cause a huge financial loss for fintech companies but also can pose to be a huge blow to their image and reputation. If massive financial institutions like Paypal have to face such breaches, it's only a matter of time before other fintech companies are also exposed to a similar fate. Such attacks create a drastic impact on the lives of affected individuals as it opens up a possibility for identity theft, subjecting the safety of the individuals and their families to a great risk!

Cyberthreats Faced By Fintech Companies

The financial sector has always been a prime target for cybercrimes and scams. The emergence and rapid rise of fintech companies have only amplified the threats of a potential breach. Since fintech companies are mostly digital-first, allowing users to leverage financial benefits through the internet, there is a lot of vital data that needs to be protected, thus requiring a robust and impenetrable authentication parameter. According to ImmuniWeb, almost 98% of the top 100 global FinTech startups are prone to data vulnerability and cybersecurity breaches such as phishing, brute force attacks, third-app security attacks etc.

Some of the top risks faced by fintech companies include the following:

1. Phishing: In this technique, hackers use deceptive methods to trick users into giving their valuable credentials to the hacker.
2. Brute Force Attacks: Hackers use sophisticated tools to forcefully retrieve the user's credentials from the database. Brute force attack is an extremely common form of cyberattack and poses a serious threat to the fintech company’s sensitive information.
3. Credential Stuffing: Hackers provide multiple plausible credentials and test them against the database to retrieve the correct user credentials and gain access to the system.
4. Account Takeover: This attack is executed by hackers who gain access to stolen credentials and use the same to carry out malicious activities and steal sensitive financial information.

Fintech companies need a robust and diversified mechanism in order to collect and securely store sensitive user information, keeping them safely out of the bounds of the grey market.

How Passkeys Benefit Fintech Companies by Solving Authentication Requirements

Passkeys are designed in such a way that it addresses all the existing authentication requirements that fintech companies need to abide by while ensuring a magnificent user experience. When a user attempts to log in to a fintech service, the user's device is used to prove their identity by signing a challenge sent by the service.?

This approach provides several benefits for fintech companies, including:

• Strong Security: Passkey-based authentication provides protection against the risks of identity theft, phishing, middle-men attacks, brute force attacks etc through its advanced security standards. This makes unauthorized access and forced logins practically impossible.
• Easy to use: Passkeys are easier to use than passwords and other forms of 2- factor authentication. Users can easily log in to a website without having to remember complicated passwords or go through the hassles of OTPs, email verification, push notifications etc.
• Cost Effectiveness: FIDO passkeys can be more cost-effective than other forms of two-factor authentication, as they do not require the use of SMS or other forms of out-of-band communication, thus helping fintech companies save tons in profits.
• Highly Scalable: FIDO Passkeys are highly scalable owing to their simple authentication requirements that are easily provided by most electronic devices. Any device with a biometric scanner can easily avail passkey solutions, making them a reliable option for fintech companies.

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