Early this year, the business solutions arm of Telekom Malaysia Berhad (TM), TM ONE announced a collaboration with Korean-based blockchain firm, FNS Value Co. Limited (FSNV). The agreement between the two parties will position TM ONE as the sole distributor for its FNSV Blockchain Secure Authentication (BSA) in Malaysia and Indonesia.
According to FNSV, BSA is the world’s first patented solution based on blockchain technology that does not require a password for authentication and yet is very simple to use, extremely secure, and impenetrable immutable application.
News of major corporations like TM ONE aggressively pushing for blockchain solutions here in Malaysia marks a major milestone for the blockchain scene.
This story seems to have largely flown under the radar with news relating to 5G and Industrial Revolution 4.0 (IR4.0) dominating the headlines, which is why we sat down with Executive Vice President / Chief Executive Officer of TM ONE, Ahmad Taufek Omar to get a sense of the company’s vision for blockchain security in Malaysia.
The Case for the Death of Passwords
Getting rid of traditional login access via passwords makes a great deal of sense, they are a relic of an earlier technological era and a major inconvenience considering that the current digital lifestyle demands users to have numerous online accounts for various purposes. Having to deal with that many accounts, it is no surprise then up to 51% of users reuse their password.
When you combine the inconvenience alongside the fact that some studies have alluded to passwords being the root cause of 80% of data breaches, we can start to piece together the business case for Banking, Financial services and Insurance (BFSIs) — especially since it is far more crucial for them as they are dealing with money.
Touting its advantages, Taufek strongly believes that blockchain authentication is well designed to solve the password issues and transform to a more secured and advanced login method.
According to him, the main advantage of BSA is the automation of control over transactions security with fast, secure authentication and verification technology. BSA prevents fraud and abuse of the existing ID and Password based authentication systems and solve many other identity problems such as the user credential attack and hijacking.
Explaining why he thinks that is the case, he further added, “A blockchain-enabled solution can simplify the data objects using various algorithms, each offering a different level of anonymity to its users, which non-blockchain solution cannot process in few seconds. These include authenticating a real or a clone mobile device (what you have), authenticating your device and user profile (who you are) and multifactor authentication (what you know).
Non-blockchain solution is unable to store and maintain data protection on multiple devices. BSA implements its data structure in the form of cryptography that shall be immutable, irreversible and tamper-proof that is not present within non-blockchain solution.”
Will Banks Be Receptive towards Blockchain-Based Authentication?
Taufek is confident that the BFSI industry will eventually adopt blockchain-based secure authentication product to cater to the digital banking needs.
He revealed that with solution BFSIs could potentially enjoy cost savings of around 50-60% in security management and operations costs. He shared that the savings would derive from the reduction of password management systems, operations and support services related to backup and recovery, alongside potentially eliminating the need for One-Time Passwords (OTPs) sent via SMS altogether.
What he said seems to be in line with the think of FIDO Alliance, an organisation that is formed to progress the world beyond password with members like Google and Amazon, where they suggested that the average cost password resets is around US$ 70.
Taufek believes that in an age where banks and fintechs alike are all fighting to capture the digitally savvy market, the industry should use every tool at their disposal to delight their customers — and that includes thinking of security as a feature instead of a necessary evil.
Using TM ONE BSA solution, Taufek said that consumers will no longer have to remember their passwords to perform banking transactions. This is compared to right now, where biometrics in most banking apps only allow for customers to do simple functions like check their account balance.
He believes that this is an appealing digital value proposition that banks would likely to invest in, and he looks forward to position TM ONE as the preferred platform for the BFSI sector when it comes to blockchain-based secure authentication. Moving forward, Taufek is also looking to extend this solution to Indonesia and other ASEAN markets.
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