In recent years, the advancements in financial technology (“FinTech”) have made it more convenient for people to manage their financial needs. First developed for simple tasks like viewing account balance, innovations in the industry eventually allowed users to conduct more complex functions, such as bills payment, e-commerce payments, and money transfers. This paved the way for the continual growth of FinTech services worldwide, which already had more than 2 billion users in 2021.
However, because of the monetary nature of the sector, FinTech platforms are a constant target of cybercriminals. Numerous fraud and data breach incidents are reported every year, leading to billions of financial losses for financial firms and their clients.
This is why investing in robust digital security measures is a top priority for many companies. Apart from software protection, FinTech services implement stern identity verification methods to prevent malicious people from abusing their systems. Nevertheless, it still has a common weakness:passwords.
Knowledge-based credentials have been the most accepted form of identity proofing in many industries. But with sophisticated cyberattack strategies, passwords are now highly vulnerable to fraudsters. In addition, people regularly forget their login credentials.
This forced FinTech firmsto adopt advanced identity verification systems, such as the FIDO2 standards. FIDO2’s login solution requires organizations to utilize multi-factor authentication (MFA) in their processes. The MFA method will include a cryptographic key, knowledge factors like pattern swipe, and biometric identification.
In the ever-growing digital world, legacy systems are not enough to mitigate fraud risks. Deploying modern identity authentication systems will help FinTech services ensure that they can provide a seamless login experience for their customers without giving bad actors a chance to infiltrate the accounts of their targets.
To learn more about the advantages of eliminating passwords in the FinTech industry, check this infographic from authID.