NFTs, The Blockchain, And The Future Of Fraud – Fin Tech
NFTs, cryptocurrency, the blockchain and more are disrupting the industry and causing a shift in the market, causing players to consider what the landscape might look like going forward. This led us to ask: how will innovations in technology affect the industry? And how will these innovations affect other markets?
DeFi. BaaS. Neobanks. BNPL. Although these terms sound fictional at first glance, they are the future of finance and digital technology as we know it. And as we learned from WIT-affiliated experts and renowned technology analyst Scott Steinberg, NFTs, cryptocurrency, the blockchain and more are financial technologies that are disrupting the industry and causing a shift in the market, prompting players to consider what the landscape might look like. proceeding. This led us to ask: how will innovations in technology affect the industry? And how will these innovations affect other markets?
The development of NFTs
NFTs, or non-fungible tokens, have dominated headlines for the past couple of years, becoming a popular topic of discussion among artists, celebrities and—you guessed it—fintech companies. The technology, as described by Business Insider, is “a unique digital asset that represents ownership of real-world objects such as art, video clips, music and more. NFTs use the same blockchain technology that powers cryptocurrenciesbut they are not a currency.” So while NFTs are not financial products, they operate from the same platforms. And the underlying technology offers opportunities for innovation across industries, especially finance.
At the top, everyone wanted to get their hands on (or create their own) NFTs. But lately, Steinberg feels that this technology is being met with increased amounts of scrutiny, and with good reason. Over the past few months, we’ve seen how easy it is to swipe these digital assets and realize how much their value is based on the supply and demand of the piece rather than the actual monetary value. But going forward, Steinberg predicts a shift.
He explained that right now NFTs are in their early stages of development; everyone is trying to figure out how to use them properly. Companies are asking “How can we monetize this in a way that is acceptable to consumers, and what will this technology fundamentally add to the online experience?” Currently, Steinberg is seeing an increase in companies trying to play in the space, although it hasn’t always been well received. But overall, he feels that NFTs will be a part of finance going forward, whether it’s going to be a bigger one or not. And as we’ve seen so far, the space is likely to be littered with lawsuits over infringement, false advertising and more.
But what about the blockchain technology these tokens are built on?
Blockchain to break barriers
To evaluate the future of blockchain technology, we must first answer the question: “What is a blockchain?” According to Investopedia, a blockchain is “a distributed database or ledger shared among the nodes of a computer network.” A blockchain offers a secure platform for data storage, and as we mentioned above, plays a significant role in supporting NFT and cryptocurrency systems. But Steinberg sees this technology playing a bigger role in the future of finance.
For starters, he sees blockchain solutions, smart contracts and the like as providing a digital system of accounting where you can track the movement of almost any asset around the world, enabling the seamless movement of money or ownership rights faster and more affordably. But even though this solution is believed to be protected, Steinberg feels that companies are not focused on the real use of this technology and how it can create future security risks.
Steinberg reported: “Many providers are currently concentrating on peer-to-peer payment solutions and quickly moving money online through apps or cryptocurrencies. But I would think that they may not have focused as much on issues related to new devices that will be in capable of storing and exchanging this information.” For example, your credit card is getting smarter and able to store information; Your entire digital life will live on these devices going forward, introducing opportunities for fraud, ID theft or interoperability challenges, especially as the use of biometric technology increases.
Biometric data blunders
While fraud in finance may be burdened by the blockchain, Steinberg also feels that many companies in the fintech space have not thought enough about the rise of biometric technology and how this system of digital identification could affect the industry. Your digital ID travels wherever you travel, even into the metaverse and virtual worlds, and the fraud that can occur goes beyond a simple stolen password. Steinberg laments: “It’s one thing if someone steals my password – what happens if they replicate my retina scans or fingerprints when that’s how I access my fintech payments and access my bank account? And what happens when we go into a world of deep fakes where someone can scan your digital image, create a twin, and then present themselves to the world as you in a very realistic way that looks like we would be talking to each other today?”
The issues raised in this area of fintech will only expand as companies race towards a digital and online future where many different devices and touchpoints will use peer-to-peer, online and crypto-based payments. Steinberg feels that this is again a case where the use cases and challenges have not been thought through. And when it comes to litigation, by Steinberg’s definition, conflicts surrounding this shift will keep lawyers in business for many, many years. But for now, what is being done in the industry to prepare for this type of fraud?
Biometric fraud prevention
When asked about security measures for biometric fraud, Steinberg said there are almost none implemented at the moment. He has not seen security measures designed to defend against fraud, which opens the door for hackers to use consumers’ biometric data to, say, break into an ATM and steal money. Today, rather, we see a lot of preparation around how these technologies and their advocates will be used. We have increasingly integrated them into airports, factories, offices and manufacturing centers around the world, transferring more and more information to technology.
But as Steinberg said, more and more governments are going to move to these digital forms of ID, and that will present enormous challenges going forward. The caveat is this: if it’s high-tech or if it’s online, it can be stolen, it can be destroyed, and it can be replicated.
If you missed additional insights from our conversation with WIT affiliate expert Scott Steinberg, check out his expert opinion on the wireless industry, virtual reality and the rise of artificial intelligence. Steinberg is hailed as one of the world’s most famous futurists and strategic innovation consultants. He has been featured in hundreds of media from CNN to TIME to The Wall St. Journalwith Fortune 500 calling him a “defining figure in business and technology” and “top trendsetter to follow.”
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