Tokenization: The Future of Financial Cyber Security

As personal banking increasingly moves online, the notoriously fastidious finance industry is struggling to cope with the new ways that consumers spend and save digital money. The Wall Street Journal’s Irving Wladawsky-Berger spoke on May 16th at a cybersecurity conference in New York City that focused on the finance industry’s past, present and future as it pertains to technological advances. Wladawsky-Berger’s remarks were mainly centered around the way that digital financial records are presently organized and documented, and how disruptive technology can help create a new way of recording financial transactions.


Set the Record Straight


Wladawsky-Berger seeks to reinvent the ledger, that centuries-old staple of banking. He cites a 2014 report by the Bank of England that claims the ledger has remained mostly untouched since the 16th Century. Client information — names, addresses, account numbers and balances — is all stored in a “secure” place. Since the dawn of written records, this has been a manageable task: there is no way to derive information from a physical ledger other than by having it in one’s possession. But the Internet has created fiber-optic pathways that expose every bank in the world to cyber theft. Rather than undertake the Sisyphean task of protecting this information from hackers around the globe, Wladawsky-Berger advocates the transition of record-keeping to blockchain technology that tracks changes with features such as timestamps. Blockchain data decentralizes the ledger as a permanent record, making it possible to verify Internet transaction history without knowing the identity of the other party.


Payment Tokenization


The blockchain concept gets at the heart of the Internet’s allure: unfettered access to a global market for consumers across all industries. But consumers still operate through banks because of the identity protection and security they offer. Consumers don’t like giving out sensitive information without knowing that whoever receives it is accountable and identifiable.Jerry Cuomo, an industry leader in blockchain technology and a fellow speaker at the New York conference, believes that this problem can be sidestepped through tokenization. By restricting sensitive data to the parties that are actually involved in the transaction, tokenization eliminates the ledger concept from modern banking by replacing a stream of bank account numbers and client information with randomly generated codes that lose their value after being used.


Financial Cyber Security with CertainSafe®


CertainSafe’s award-winning MicroTokenization® and MicroEncryption® technology secures data at rest and in motion, allowing us to ensure compliance, eliminate the possibility of mass data breaches, and protect our clients’ sensitive data without obstructing the flow of business. For more information on how we are advancing financial cyber security, please visit our homepage or contact us today.