Criipto CEO Highlights the Real Threats in Digital Identity and Security at Authenticate 2024: Phishing Over Data Center Security

Niels Flensted-Jensen, CEO of Copenhagen-based Criipto, recently acquired by BankAxept AS, parent company of Norwegian BankID, offered a broad perspective on digital security during his talk at Authenticate 2024. Drawing on his experiences, he discussed the critical differences between securing data centers and ensuring the safety of a wider population, referencing topics such as Romanian cybercrime, personal phishing incidents, sports betting, and even the limitations of security in transportation.

Flensted-Jensen’s primary argument centered on the growing threat of phishing, pointing out that too much focus has been placed on backend cybersecurity while neglecting phishing, which remains a major issue. He remarked that regulators and frequent attacks have diverted attention from the more pressing threat of phishing, adding that hackers are no longer breaking into data centers but instead deceiving users to steal their money.

As part of his talk, he described a Norwegian phishing (or “smishing”) case involving Romanian criminal groups who sent fraudulent SMS messages posing as Norway’s department of motor vehicles, tricking victims into revealing their digital identities. He followed this with a personal story of how his wife, an art historian, was also deceived by a phishing scam disguised as a Norwegian bank.

Flensted-Jensen highlighted the widespread use of digital IDs in Scandinavian countries, pointing out that while the standardization of digital identity, as seen in Denmark, is often ideal, it also leaves verification systems vulnerable to fraud. He argued that digital identities, which are designed to work uniformly across platforms, make them particularly susceptible to phishing attacks. He proposed FIDO passkeys as a potential solution to this problem.

As he delved deeper into security issues, Flensted-Jensen contrasted the benefits of providing good security for many versus great security for only a few, typically those who can afford it. He criticized the tendency of legislators to favor higher levels of security without considering the broader impact, likening this to a scenario where transportation security measures would result in cars made of cast iron traveling at very slow speeds.

He also discussed the evolving landscape of biometrics, mobile identity, and client-side cryptography, noting that many tasks that once required data centers can now be handled by personal devices. He referred to decentralized identity wallets, which can store verifiable credentials from trusted sources and be presented to relying parties. However, he noted that regulatory challenges remain, such as issues with cloud-synced passkeys and attestation.

Flensted-Jensen pointed out that usability is the key to adoption for web wallets. However, beyond usability, economic incentives are essential, particularly in industries where high-frequency use justifies the cost. He provided the example of online sports betting, where repeated logins are common due to the addictive nature of the activity. He noted that users in such environments sign in frequently, sometimes multiple times a day, to check game results, which makes authentication systems highly relevant.

In summarizing his arguments, Flensted-Jensen emphasized the need for regulators to address phishing more aggressively, to prioritize building solutions for the masses, and to focus on user experience. He also expressed a preference for staying within browsers and avoiding the restrictive environments of app stores.

The acquisition of Criipto by BankAxept in September 2024 was driven by interest in Criipto’s developer-friendly integration platform, according to Øyvind Westby Brekke, CEO of BankID BankAxept.

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