Cybersecurity attacks mainly target consumer data, such as financial accounts, since they are easier to access. Due to the overreliance and ease of access on handheld devices and computers to access digital accounts, most hackers are targeting digital wallets.

Due to these concerns,  banks and other financial institutions are integrating security measures such as hardware security modules (HSM).

Hardware security modules are a critical security measure that controls access to devices used to generate pins for financial transactions and protect digital wallets. It encrypts the financial data exchanged amongst different people to avoid attack during transmission. They provide secure, tamper-proof, and reliable digital security measures ideal for protecting digital wallets and other accounts, such as e-commerce digital wallets.

To understand its potential, it is necessary to understand how it works, its applications, and its benefits to the company.

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Types of Hardware Security Modules

There are two main types of HSM, and you can adopt either depending on your needs:

1. General Purpose HSM: This module is suitable for PKI infrastructure protection and supports PKI security features. When using PKI for protecting assets such as crypto wallets, and other payment-related data, HSM can be suitable for protecting PKI from internal and external breach threats.
2. Payment and Transaction HSM:  In this type, the security module protects different digital payments and other options, such as cards. The payment hardware security module are ideal for institutions such as banks which control and monitor customer digital wallets. These modules protect the systems that generate pins; they encrypt transactions and create authentication protocols to prevent unauthorized access to these accounts.

 

How does HSM Protect Digital Accounts?

For payment processes that depend on pins, HSM is critical for controlling account access and financial transactions. This is ideal for VISA, MasterCard, and other payments that require a code sent to a device; you input the code or pin to allow the transaction.

HSM can be used to generate the pins and for other purposes, such as pin validation and management. The application can be used for payment options such as POS and ATMs to authorize different transactions.

When using mobile for various payment options, you can rely on the generated pin to secure your transaction.

HSM can be the first line of defence for those who hold cards and love making all transactions via cards. The EMV (Europay, Mastercard, and Visa) chip in the card can be produced and customized by HSM for additional security. In case of tampering, the account cannot be accessed or used for payments such as POS or ATM withdrawals.

For electronic fund transfers, the PIN and code generated by HSM can be used to prevent unauthorized transactions. Normally, when your account is linked to a phone, you have to receive an authorization code on your phone to allow the send of funds to another account. For additional security, the PIN can also be essential for digital account access. To access the account, one must obtain a code only sent to your phone as an additional account access strategy.

The main protection strategy for digital card holders is using cryptography during payments. Cryptography is essential for validating the cards and users to ensure authorization. It will help verify the party issuing the card to avoid fraud, such as someone paying using a stolen card.

HSM generates and stores encryption keys exchanged amongst different devices. The encryption keys encrypt information to prevent access by another system while in transition. Randomly generated keys and codes are ideal for securing information to log into your wallet.

Additionally, the details provided, i.e., the pin or the code, will be used to grant access to the wallet. This code can only be sent to the account owner’s mobile phone or shared with their email address.

The generated keys are necessary to protect card generation systems by securing all the details integrated into the EMV chip. This is integral to prevent someone from withdrawing crucial data from the digital wallet account using the card through an ATM.

Businesses That Need HSM Protection

Any company involved in services that require financial protection, use of pins to access a platform, and those holding sensitive data can appreciate HSM’s security impact. First, it protects the hardware and software systems involved in generating pins and cryptographies. It provides temper-proof, temper-evident, and tamper-resistance protection to the physical systems essential for securing digital wallets.

When transmitting sensitive data related to payments, such as bank details, amounts, and other information, HSM can be used to secure these transactions. HSM is critical for better management for organizations that rely on cryptography keys to protect financial and other sensitive data.

First, all the cryptography keys and systems will be stored in one location, further boosting security since the systems are tamper-proof and inaccessible. Consolidated data security protocols are much easier to protect than decentralized systems. This also makes other activities, such as managing cryptographic key life cycles, easier.

You can automate the process to make it faster and quick, reducing human involvement, which can be an additional risk.

Conclusion

Protecting digital wallets should be a key priority for institutions handling financial data and managing digital accounts. It is also essential to protect the system that generates the cryptographic keys using tamper-proof technologies like HSM.
HSM is ideal for encrypting, authenticating, and securing financial transactions through different networks. You can use it as per your needs.