Industry predictions: AI and ML use against DDoS attacks and the positives of PSD2

Peter Bassill, CEO and founder, Hedgehog Security

Peter Bassill, Hedgehog Security

The time of the blockchain is here

Okay, I know, you have all heard me say it a million times, blockchain is not the answer. But it has developed significantly and now we are starting to see the application of blockchain theory and technology into the security of information, in a way that works. In 2021 I predict we will see the adoption of blockchain technologies, albeit in early life stages, in use for securing information and validating/supporting the KYC process.

(R)evolution of AIDDoS

2020 saw some significant DDoS attacks against operators, that were used to mask the highly targeted attacks used to infiltrate and encrypt operators and affiliates systems. I predict that in 2021 we will see the applied use of AI and “machine learning” to the current DDoS techniques, leading to the AIDDoS. A highly adaptive form of attack that uses AI to determine what is and is not working. Gone are the days of velocity and volumetric attacks.

The age of the smaller operator is here

The market is full of large operators with giant networks and many staff. In 2020 we saw the crippling of the labour market and the drastic and dramatic shifts to home/remote working. While this has caused pain for the larger operators, the small ones have adapted and adopted the new working paradigm with relative ease. While this new way of working has opened up new challenges in the security and operating models of many, the changes have been rewarding.

Alberto Pittoni, head of payments, Soft2Bet

Alberto Pittoni, Soft2Bet

Digital wallets will become the new debit card

Wallets have become increasingly common over the last 12 months and will continue to do so throughout 2021, eating further into the market share of debit and credit cards. This is partly because transaction processing is safer and more convenient via wallets, both online and in retail, but also due to the mainstream adoption rate we’re seeing from the likes of Apple Pay, Google Pay and Samsung Pay.

Wallets have already become the medium of choice in many Asian countries for similar reasons, and I expect this to become a reality in the Western world also very soon. To a certain extent, the current pandemic has accelerated this development, penalising cash and plastic card payments in favour of contactless, even in cash-dominant cultures.

PSD2 and open banking will offer plenty of industry positives

With the introduction of PSD2 legislation in Europe, banks are obliged to make relevant customer information available to third-party companies via effective APIs to process instant payments. This is a revolutionary development on paper but it is still early days, and we are yet to see the full benefits of the new system.

I expect that once the entire PSD2 infrastructure is in place and functioning properly, a large proportion of transactions will switch to payment initiation technologies and providers. These types of transactions are much cheaper than card transactions to process, especially for smaller merchants. There’s also less risk of fraud, which will enable operators to offer lower chargeback rates.

Localised payment methods will be key

Although my previous predictions might indicate a potential consolidation in the payments space and therefore a reduction in the payment methods available, I doubt this is going to be the case – and there will be plenty of local diversity. Many regional payment options have maintained a healthy level of growth and will continue to offer a product that meets the needs of players and operators on a market-by-market basis.

Although technology is a strong driver in behaviour changes when it comes to payments, it’s also true that people stick with their existing methods when there is not a clear benefit in switching, especially if local providers consistently update their products in line with demand. Examples of this can be found in regions such as Asia, Africa and South America, but also in Europe where a large portion of transactions are made via local payment methods.