Fintechs have revolutionized the financial industry by providing innovative and convenient baking services to customers around the world. However, with the increasing number of online transactions, security has become a major concern for both fintechs and their customers. By leveraging the latest in authentication technology, fintechs can provide enhanced security for their customers.
In this blog post, we will explore how FIDO2 works and how it can benefit fintechs.
What is FIDO2?
FIDO stands for Fast Identity Online, and FIDO2 is an authentication standard that provides a secure and easy-to-use method of digital authentication. FIDO2 is built on two main components: WebAuthn and CTAP (Client to Authenticator Protocol). WebAuthn is a browser-based API that allows web applications to communicate with FIDO2 security keys, while CTAP is a protocol that allows FIDO2 security keys to communicate with devices such as smartphones or computers.
FIDO2 uses public-key cryptography to authenticate users. Public-key cryptography involves two keys: a private key and a public key. The private key is kept secret by the user, while the public key can be shared with anyone. When a user wants to authenticate, they use their private key to sign a challenge provided by the server. The server verifies the signature using the user’s public key.
How can FIDO2 benefit fintechs?
- Stronger security: FIDO2 provides stronger security than traditional authentication methods such as passwords or SMS-based authentication. Passwords can be easily guessed or stolen, while SMS-based authentication can be intercepted by hackers. FIDO2, on the other hand, uses public-key cryptography, which is much harder to hack.
- Easy to use: FIDO2 is easy to use for both customers and fintechs. Customers only need to register their FIDO2 security key once, and then they can use it to authenticate across all FIDO2-enabled services. Fintechs can also easily integrate FIDO2 into their technology platforms using the WebAuthn API.
- Cost-effective: FIDO2 is a cost-effective solution for fintechs. Implementing FIDO2 authentication can be less expensive than maintaining a traditional authentication system that requires constant password resets and user support.
- Regulatory compliance: FIDO2 can help fintechs comply with regulatory requirements such as PSD2 and GDPR. FIDO2 authentication provides a strong level of security, which can help fintechs meet the regulatory requirements.
In conclusion, FIDO2 is a secure and easy-to-use authentication standard that can benefit fintechs by providing stronger security, ease of use, cost-effectiveness, and regulatory compliance. Fintechs should consider implementing FIDO2 authentication to protect their customers’ sensitive data and provide a secure and convenient experience.