A majority of online crimes, especially data breaches, have financial
motivations. Nearly 80% of data breaches aim to obtain information
such as financial account information, social security numbers,
insurance information, and online banking details. Once this
information is obtained, hackers misuse it to gain illegal access to
bank accounts, defraud institutions, and other such financial and
Companies operating in the financial technology (FinTech) sector,
particularly cryptocurrency exchanges, must ensure high levels of
security in order to protect their users and themselves from being
exploited. FinTech companies, especially, are expected to have higher
levels of security and data protection by users. A single factor
legacy authentication system is not enough to provide customers with
the satisfaction that they are transacting safely, nor does it provide
them with reassurance that their login and financial information is
A Tricky Balance
Implementing robust security controls could come at the expense of a
smooth user experience. FinTech companies such as cryptocurrency
exchanges follow intense regulatory structures with user protection
being a top priority. However, having a variety of users with a
multitude of technological backgrounds, FinTech companies need to
ensure the authentication process is as smooth as possible. Striking a
balance between highly secure authentication standards and
frictionless customer experiences is a delicate, yet crucial one.
Studies have shown that companies can achieve up to 24% increase in
conversion rates with a frictionless security system.
Another major challenge to implementing enterprise-wide robust
security controls boils down to organizational complexities. FinTech
companies, especially cryptocurrency exchanges, need not only to
ensure their customer data is well protected, but need to ensure there
are sufficient internal security controls as well. Outsider and
insider threats are very real, and many organizations find themselves
victims of targeted attacks like phishing, due to highjacked employee
An important factor for all FinTech and blockchain companies to
consider is how compliant their security systems are. Open Bank in the
UK, the PSD2 directive in the EU, and the ‘additional factor of
authentication for all Card Not Present (CNP) transactions’ in India,
for example, require all financial transactions to be backed by strong
customer authentication (SCA).
Regulatory agencies and policymakers around the world have developed
stringent legal frameworks that impose strict requirements on private
sector actors operating in FinTech. With the growing number of
blockchain, cryptocurrency and FinTech companies pursuing such
regulations, having compliant identity access management systems
become imperative to implement.
How do I protect my FinTech company?
FinTech firms face a number of interrelated challenges that solutions
like LoginID can solve. The inherent sensitivity of financial and
payments data, and the fact that this information is highly sought
after by bad actors, means that companies must use the most secure and
accurate authentication and identity management mechanisms available
to keep their customers safe.
The emergence of open banking is creating unprecedented opportunities
for financial institutions to innovate and for consumers to gain
control over their data. This potential can only be achieved when
authentication and identity management are both secure and convenient.
LoginID’s solution provides cutting edge authentication and identity
verification solutions that allow FinTech companies to attain the
highest level of security and compliance with laws such as the EU’s
Revised Payment Services Directive (PSD2), without compromising
convenience for the user. The following features of LoginID’s
FIDO2-enabled authentication solutions ensure compliance with the
Strong Customer Authentication
The PSD2 requires that users be authenticated using a mix of at
least two elements that relate to knowledge (something you know),
possession (something you own), and/or inherence (something you
are). LoginID’s authentication solution is a two-factor
authentication (2FA) method that is explicitly PSD2 compliant. By
contrast, other proprietary biometrics solutions on the market are
single factor, meaning that an additional safeguard must be added.
The PSD2 requires companies to mitigate the risk that any of the
elements used for authentication are accessed by unauthorized
parties. LoginID’s solution ensures that the elements reside in
the authenticating device – even if the device is stolen, that
information cannot be read, copied or transferred, and the user
cannot authenticate unless they have the necessary inherent
features (e.g. biometrics) or knowledge.
The PSD2 mandates that payment services must have a secure
mechanism that allows users to review and confirm the transaction.
LoginID supports this through a mechanism by which the details of
the transaction and a confirmation request are sent to the user,
who in turn authorizes payment – e.g. by scanning a fingerprint.
How do I protect my Cryptocurrency company?
LoginID’s biometric authentication solution is designed to help crypto
exchanges drive user convenience, maximize security, and achieve
In order to drive conversion, exchanges must address users’ main
priorities, which are speedy processing of deposits and
withdrawals, a user-friendly interface, and an easy-to-use
verification process. Most authentication solutions used by
exchanges fail to address these priorities, requiring users to
manually enter dynamic passcodes.
LoginID does not - the user experience is as simple as scanning a
face or fingerprint, irrespective of the device used. In addition,
LoginID’s FIDO protocol-based solution is supported on major
operating systems and browsers, including Google Chrome, Mozilla
Firefox, Microsoft Edge, and Apple Safari. It also runs on both
Windows 10 and Android platforms, and, from September 2020, Apple
OS. This flexibility means that users have the same high-quality
experience no matter which technology they are using.
LoginID incorporates the World Wide Web Consortium (W3C)/FIDO
Alliance official web standard for web authentication (WebAuthn).
WebAuthn makes passwords & phishing a thing of the past by
authenticating through ‘something a user is’. It is crucial that
websites and services implement WebAuthn to create a secure
environment without compromising usability – LoginID’s solution
achieves this for our customers.
LoginID authentication is a two-factor authentication (2FA) method
that is compliant with the Strong Customer Authentication (SCA)
requirement of the EU’s Revised Payment Services Directive (PSD2).
Globally, financial institutions and the regulations that govern
them are adapting to the growing trend of open banking. By
utilizing LoginID’s solution, an exchange can leverage public key
cryptography techniques combined with ‘one-touch’ biometrics
and/or security keys to enable convenient and secure compliance
with open banking standards.
LoginID’s FIDO-based solution makes it easier to comply with the
EU’s General Data Protection Regulation (GDPR). In particular,
FIDO standards have been developed with ‘privacy by design’ in
mind - a key GDPR requirement. In addition, LoginID’s multi-factor
authentication enables companies to meet their GDPR obligations to
implement strong data protection safeguards.
FinTech, blockchain and cryptocurrency companies need to implement
multifactor authentication in order to protect their systems and
transactions from a range of internal and external attacks, all while
being regulatory-compliant. Everything from applications, resources,
networks, and systems could benefit from a robust security solution.
By deploying multifactor authentication (MFA) solutions, such as
LoginID, financial companies can lower data breach risks, thereby
reducing the risk of users churning, all while providing a
frictionless experience to their customers.
LoginID is a comprehensive FIDO-based multifactor authentication
solution that offers frictionless authentication. Created with
developers and enterprises in mind, LoginID is FIDO-certified and
adheres to P2D2 principles. With an implementation time of just one
hour, LoginID’s multifactor authentication solution is a quick, simple
to integrate, cost-effective, and regulatorily compliant tool to give
your business peace of mind around security, allowing you to focus on
growing your business.
Get started for free by checking out the demo
Learn more about LoginID’s solutions