PayPal Passkeys and the Need for Identity Access Management in 2023
As the financial industry becomes increasingly digital, there exists a need for advanced solutions for identifying employees and customers regardless of how or where they are engaging with a firm.
The global COVID-19 crisis saw unprecedented numbers of customers turn to digital platforms to manage their finances as bank branches and other financial businesses were forced to close their doors to comply with lockdown restrictions. And even now the worst days of the pandemic are behind us, this pattern has continued, with many people now awake to the convenience and simplicity of digital financial services.
However, we now live in an era where bank employees are not able to look at a customer in person and/or ask for physical proof of identification. This also applies to employees who are working remotely and need to access sensitive information from outside of the physical business location.
Identity Access Management
The solution to this challenge can be found in identity access management. A strategical framework which validates identity using digital means and grants appropriate levels of access to secure systems based on the needs and clearance of the person requesting it.
Identity access management is a critical component in the fight against the myriad threats of the contemporary cybersecurity landscape and helps firms leverage automated technology to add extra layers of defense between a customer’s valuable data and anyone who may wish to access it for nefarious purposes.
"Automation should focus on defensive capabilities like security operations center (SOC) countermeasures and labor-intensive activities, such as identity and access management, and reporting,” says McKinsey. "AI and machine learning should be used to stay abreast of changing attack patterns. Finally, the development of both automated technical and automatic organizational responses to ransomware threats helps mitigate risk in the event of an attack.”
Identity access management can take the form of simple username and password combinations, but we are increasingly seeing firms adding multiple layers of security which include technologies such as multifactor authentication and biometrics, among others.
PayPal
As the world’s number one digital payment platform, PayPal is often a leading voice in the advancement of identity access management technology and has recently announced its latest development in this field – Passkeys
Created by the FIDO Alliance and the World Wide Web Consortium with the aim of creating a new gold standard for identity access management, passkeys replace passwords with cryptographic key pairs. This method of asymmetric cryptography, also known as public-key cryptography, is a process which uses a pair of related keys – one public and one private – to encrypt and decrypt a message and protect it from unauthorized access or use.
As a founding member of the FIDO Alliance, PayPal has the privilege of being one of the first financial firms in the world to make the passkey method of authentication available to its customers. With recent estimates stating 81% of hacks being related to password stealing/guessing, and a sizable proportion of users using the same passwords for multiple logins, passkeys provide a seamless and secure alternative to this system.
Passkeys will also benefit online firms. Many customers abandon online transactions due to forgetting passwords – a concern which is completely eliminated by the introduction of passkeys.
"Launching passkeys for PayPal is foundational to our commitment to offering our customers safe, secure and easy ways to access and manage their daily financial lives," said SVP and GM, Head of Consumer, PayPal, Doug Bland in a press release. "We are excited to provide our customers with a more seamless checkout experience that eliminates the risks of weak and reused credentials and removes the frustration of remembering a password. We are making it easier for customers to shop online."
Users on iOS powered devices running iOS 16, iPadOS 16.1, or macOS Ventura can quickly and simply create a passkey to log into PayPal. Once created, the passkey is synchronized with the iCloud keychain. Passkeys were launched for PayPal users in the US in October 2022, with plans to roll the service out to other countries early in 2023 – adding the functionality to other platforms such as Android powered devices at the same time.
Final Thoughts
Identity access management is going to become increasingly important as the number of transactions conducted online grows and the volume of cybersecurity threats alongside them. Advanced digital solutions such as biometrics, multifactor authentication, and the passkey technology being launched by PayPal are important weapons in this fight and will empower financial brands to better serve their customers online whilst simultaneously increasing security and user confidence.
You can hear Sr. Director, Head of Cybersecurity Strategy - Enterprise Cyber Security, PayPal, Dimitry Shvartsman speak at InfoSec Finance Connect 2023, being held in March at the Rancho Bernardo Inn, San Diego CA.
Download the agenda today for more information and insights.