1. Artificial Intelligence and Machine Learning
A number of FinTech tools have been designed specifically to use AI technologies to detect fraud, identity theft or tract suspicions usage of a credit card or bank account in real time. The system uses behavioural science, cybersecurity principles and its own previous experience (Machine Learning for the win!) to determine if any particular transaction is genuine or not. As more and more of the global transaction volume moves to a fully digital platform, the need for faster and smarter AI based fraud detection is skyrocketing.
Blockchains are meant to be secure by design. Perhaps the most important aspect of Blockchains is that they provide transactional level integrity – which means that transactions cannot be modified, repudiated or destroyed. In addition, there is also the added benefit of not having a single point of failure in a blockchain due it’s decentralized and distributed nature. Finally, confidentiality might also play a big role in protecting potential targets from becoming identified in the first place.
There are more than half a billion customers currently using Biometrics for identification and authentication of financial transactions. By 2020, it is expected to become the primary identification method for financial transactions. Biometric tools not only offer an amazing level of security due to the uniqueness of certain human biological features, they also are the easiest to use. Why bother remembering hundreds of unique passwords when you can just be authenticated by saying a few words or smiling into the camera?
Note: AFIS stands for Automated Fingerprint Identification System
4. Electronic identification and authentication
Signing and verifying documents digitally is more than just a technological challenge – it’s also a legal one. Which is why many countries are coming up with revised regulations on fully digital documents, including all types of legal contracts. In the EU, the eIDAS regulation standardizes electronic identification and electronic signatures across all 28-member states. In the US, something similar is covered by the ESIGN and UETA Acts.
A key defense against cyber attacks is ensuring that the attackers are never in a position to decrypt sensitive data and use it in a malicious way. Cryptography combines the disciplines of mathematics and information technology in order to create secure digital pathways. Security providers are enhancing or creating entirely new cryptographic mechanisms to protect the most vulnerable components of a financial transaction.