2021 was another memorable year. Organizations that have deployed remote processes in response to the pandemic have spent the past year optimizing and strengthening their systems to ensure a positive and safe customer experience.
However, with identity theft, payment fraud, phishing and other financial crimes at an all-time high, the work of digital security is never finished.
In this article, we have compiled the three predictions that will shape the security landscape in 2022.
1. Digital identity initiatives will increase for governments, states and the private sector
Governments around the world are launching digital identity initiatives that allow users to access a range of services through online or mobile applications.
Singapore, the United Arab Emirates and Australia have already released a digital identity system, and the EU is also moving in this direction with the revision of eIDAS and the announcement of the European digital identity.
The availability of digital identities on mobile devices will facilitate onboarding and authentication to digital applications and help combat account takeover fraud attacks.
Once a consumer is verified, they can use their digital identity anywhere, anytime online to log in or authenticate to any digital identity verification application.
Any application dealing with digital identities must adapt and support the new government digital identity systems to be relevant in the market.
Example industries are energy suppliers, banks, postal services and telecommunications providers.
In addition, the use of qualified electronic signatures will become more important as citizens can use their digital identities to legally sign contracts online.
This was further elaborated on in our webcast on The Role of Digital Identity in Account Opening & Onboarding.
2. Security Measures for Embedded Financial Offerings
Non-financial companies can offer tailored financial products to their community, such as B. Payday loans for easy and reliable access to credit or specialized digital platforms for truck drivers that offer credit for fuel financing or vehicle insurance.
Analyst firm Juniper Research expects the value of the embedded finance market to surpass $138 billion in 2026, up from just $43 billion in 2021.
Both consumers and organizations have become more open to working with non-financial institutions.
These companies have better access to consumer data, which contributes to an optimal user experience and leads to greater brand loyalty.
While these consumer embedded finance offerings offer value and opportunities for financiers, they also draw the attention of cybercriminals.
Since financing apps often involve payment transactions and bank account connections, these fintech applications are becoming even more attractive to hackers as they become more popular.
Security will play a key role as the market matures. Only the companies that combine a smooth user journey with a secure environment will stand out from the crowd.
Functionality and usability will certainly be important, but companies that don’t secure their websites and mobile apps will quickly lose their brand reputation and customer base.
3. Cryptocurrency scams will skyrocket
Crypto exchange platforms were developed very quickly from open source without taking their security ecosystem or fraud management seriously.
Since the platforms are unregulated and not secure, there is no guarantee that customers will get their money back after a hack.
In 2021, there have already been at least 32 hacking and fraud incidents totaling nearly $3 billion.
Without a doubt, the number of cryptocurrency hacking incidents and fraud losses will break records in 2022.
The most common types of crypto hacking are phishing and social engineering attacks, although the technology to protect customers from these attacks has been around for years and is used by traditional banks.
Push notifications instead of SMS one-time passwords can prevent SIM swap attacks. Also, application shielding can protect wallet applications from cloning and secret extraction.
The only way to mitigate these attacks is to introduce more regulations and rules like PSD2 and the requirement for strong customer authentication.
For clients, on the other hand, it is crucial to choose a trading platform that offers top-notch security features.
Learn more about OneSpan’s top digital fraud trends and predictions here.