K
Kathleen Martin
Guest
A recent survey by Feedzai, the world’s leading cloud-based financial crime management platform, has released its most recent Quarterly Financial Crime Report. The report analyses financial crime and consumer spending trends from more than 1.5 billion global transactions from April to July this year.
According to the data, eighteen months after the pandemic first hit, there has been a 146% increase in P2P payments, a 44% decrease in cash transactions, and a 109% increase in online transactions, to nearly double the number of card-present or in-person transactions. As a result, financial criminals have also shifted their targets online. The number of online card fraud attempts increased by 23% in this time period.
It's more imperative than ever that secure solutions can be found. Blockchain technology seems to offer the much-lauded light at the end of the tunnel. But even so, it's not unbreakable. We spoke to Vadim Kulik, CTO of VTB Bank and Russia’s second-largest retail bank, to find out more.
Blockchain is becoming the go-to solution for digital payments. How will this affect centralised, mainstream providers?
Blockchain has several undeniable advantages. Tokens on the distributed platform, for example, are an excellent technology for storing and instantly transferring digital value. Without exception, all centralised, mainstream providers are studying or already using blockchain platforms in their innovative solutions. On the other hand, the distributed registries technology allows you to take a close look at current business processes, increasing their efficiency, speed, and the security of transactions. We cannot ignore the opportunities that this modern technology opens up, if we do we’ll simply be left behind by emerging players.
How safe is blockchain, and what are its vulnerabilities?
Here, it’s better to compare classical information systems and decentralised systems based on a distributed registry platform. The security of blockchain solutions is embedded in its architecture. For example, to hack the classic centralised information system of an organisation, it’s enough to gain access to the server. For a decentralised system, access must be obtained across 30% - 50% of the nodes of the system, at least, depending on which consensus the blockchain uses.
An attacker who has gained access to the node, or the owner of the node themselves, can adjust the information in their favour – for example, canceling the transaction, but thanks to the consensus mechanism, these changes will be ignored and will not get into the blockchain. The more decentralised the system, the safer it is.
The second factor of blockchain security is that all transactions are only made using the digital signature of an account holder. In this case, the owner’s signature is verified directly within the blockchain. On the other hand, insecure storage or use of a private key may be a vulnerability, not for the entire system, but for the individual. If your private key is compromised, the account owner may lose their digital assets. In most known cases, vulnerability is the smart contract code and cause of asset losses. One of the most famous attacks in Ethereum in 2016 used a vulnerability in the DAO smart contract; several million dollars was withdrawn from the smart contract that managed the assets.
Continue reading: https://fintechmagazine.com/fraud-and-cybersecurity/defi-defense-and-better-blockchain-security
According to the data, eighteen months after the pandemic first hit, there has been a 146% increase in P2P payments, a 44% decrease in cash transactions, and a 109% increase in online transactions, to nearly double the number of card-present or in-person transactions. As a result, financial criminals have also shifted their targets online. The number of online card fraud attempts increased by 23% in this time period.
It's more imperative than ever that secure solutions can be found. Blockchain technology seems to offer the much-lauded light at the end of the tunnel. But even so, it's not unbreakable. We spoke to Vadim Kulik, CTO of VTB Bank and Russia’s second-largest retail bank, to find out more.
Blockchain is becoming the go-to solution for digital payments. How will this affect centralised, mainstream providers?
Blockchain has several undeniable advantages. Tokens on the distributed platform, for example, are an excellent technology for storing and instantly transferring digital value. Without exception, all centralised, mainstream providers are studying or already using blockchain platforms in their innovative solutions. On the other hand, the distributed registries technology allows you to take a close look at current business processes, increasing their efficiency, speed, and the security of transactions. We cannot ignore the opportunities that this modern technology opens up, if we do we’ll simply be left behind by emerging players.
How safe is blockchain, and what are its vulnerabilities?
Here, it’s better to compare classical information systems and decentralised systems based on a distributed registry platform. The security of blockchain solutions is embedded in its architecture. For example, to hack the classic centralised information system of an organisation, it’s enough to gain access to the server. For a decentralised system, access must be obtained across 30% - 50% of the nodes of the system, at least, depending on which consensus the blockchain uses.
An attacker who has gained access to the node, or the owner of the node themselves, can adjust the information in their favour – for example, canceling the transaction, but thanks to the consensus mechanism, these changes will be ignored and will not get into the blockchain. The more decentralised the system, the safer it is.
The second factor of blockchain security is that all transactions are only made using the digital signature of an account holder. In this case, the owner’s signature is verified directly within the blockchain. On the other hand, insecure storage or use of a private key may be a vulnerability, not for the entire system, but for the individual. If your private key is compromised, the account owner may lose their digital assets. In most known cases, vulnerability is the smart contract code and cause of asset losses. One of the most famous attacks in Ethereum in 2016 used a vulnerability in the DAO smart contract; several million dollars was withdrawn from the smart contract that managed the assets.
Continue reading: https://fintechmagazine.com/fraud-and-cybersecurity/defi-defense-and-better-blockchain-security
