Utimaco, a global platform provider of trusted cybersecurity and compliance solutions, hosted an event titled ‘Building a Foolproof Infrastructure in Today’s Digital Banking World’ in partnership with Securemetric and CorewareTechnology. Utimaco leaders shared insights and best practices to ensure a secure digital future.
Banks and financial service institutions (FSIs) are in charge of safeguarding consumers’ sensitive data in the modern digital environment to prevent both economic and reputational loss.
Even so, as more customers use digital platforms for their everyday transactions, current infrastructures are still evolving as a result of the industry’s digitization. The Bangko Sentral ng Philippines (BSP) claims that such circumstances put data security and identity protection in danger.
In today’s digital banking environment, how can companies secure their data infrastructure? What exactly is the present data ecosystem?
Understanding the data ecosystem
The “Four-Party Model,” as it is often referred to in the context of card payment systems, involves the cardholder, a customer using a payment card provided by a bank or other financial institutions, and the merchant, a company or individual who accepts card payments in exchange for goods and services.
Due to their acceptance of credit cards, automated teller machines (ATMs) fall under this category.
The issuing bank, which issues payment cards to the cardholder on behalf of the card networks, is another important party. In this model, the cardholder purchases goods and services from the acquiring bank, which the issuer then reimburses the cardholder for following the terms of the contract.
Using cryptographic methods for data security
When storing or transmitting a customer’s private information online during a transaction, the industry uses cryptographic techniques to protect it. Tokenization and encryption are examples of this.
The former uses an algorithm to change the data into ciphertext, a kind of encryption that can be broken with a key. The information is changed into a tokenized collection of interchangeable characters by the latter. Without the tokenization mechanism, stolen tokens have no value.
Role of HSMs in securing transactions
To create, protect, and manage cryptographic keys in a secure environment during transactions, hardware security modules (HSMs) are used. Also, HSM applications vary in terms of the four main players in the data ecosystem.
The payment card’s EMV chip functions as a micro-portable HSM for the cardholder. Nevertheless, the utilization of HSMs for the merchant side depends on the size and kind of company.
Smaller suppliers can rely on point-of-sale (POS) terminals equipped with secure memory and cryptographic hardware that can operate as HSMs. On the other hand, major merchants would need network-attached HSMs to guarantee safe transactions.
However, powerful HSMs are required by the issuing bank to create, protect, and manage the keys required to activate and process payment cards. HSMs handle all of the merchant’s financial channel keys and process the cryptographic flow in the issuer’s direction for the acquirer.
“HSMs are essential to protect the ciphered transactions across the four corners of the data ecosystem. It acts as a safe in a financial institution’s network and houses the keys needed to decrypt consumers’ critical data. Now that banking transactions are increasing; data security and identity protection are more at risk from cybercriminals. This makes HSMs vital to the key parties in the data ecosystem,” said Deval Sheth, Managing Director for Asia Pacific at Utimaco.
Protecting payments with Utimaco
Utimaco provides reliable HSMs that can securely execute financial transactions. The Atalla AT1000, a FIPS 140-2 Level 3 and PCI PTS v3 certified payment HSM is one of these devices. NayaPay, a digital payment services platform and e-money startup in Pakistan, is among the financial institutions that have integrated this HSM.
By doing this, the financial institution hopes to uphold compliance and regulation requirements while protecting the data, identities, and financial assets of its clients.
After integrating Atalla AT1000, NayaPay obtained reliable and adaptable protection for every transaction, reduced the cost of ownership by consolidating its HSM infrastructure, and, among other things, complied with security and compliance regulations.
“The Atalla AT1000 can secure critical data and associated keys for non-cash payment transactions in retail, cardholder authentication, and cryptographic keys of payment service providers, acquirers, processors, issuers, and even payment networks,” added Sheth.