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Coined by sci-fi writer Neal Stephenson over 30 years ago, “metaverse” is the biggest buzzword of 2022. This pivot to a “cyber world” where we will be using a “digital identity” to work, shop, and interact socially has attracted major brands like Epic Games, Microsoft, and Apple. Most notably, Facebook has renamed to Meta and infused $10 billion dollars into the project.
While the possibilities of the metaverse come with their appeals, alongside them will also be significant implications for cybersecurity and fraud. As we make the inevitable shift to the metaverse in the next five years or so, businesses will have to stay focused on security and regulation issues to ensure end users are protected and security practices remain up-to-date.
So what are the key concerns in this uncharted territory? The following are a few predictions in the areas of cybersecurity concerns related to the metaverse.
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Intangible Identity
With every significant digital advancement comes threat actors to capitalize on it, and consumers and businesses will need to pivot toward nimble, digital fraud prevention to keep up with this pace. According to Aite Group, identity theft was forecasted to increase to a staggering $721.3 billion loss in 2021.
As fast as the metaverse is being built, threat actors will be testing unique ways to benefit from any open doors or holes in its framework. Online attacks range from standard account takeover and phishing attacks to more complex attacks, such as hosting fake services to hijacking digital data, which is already happening in the NFT marketplace.
As digital identities are much easier to create than physical cards, security teams will need to look at using these digital footprints to identify fraud accurately and in real time. At the same time, consumers must be vigilant in protecting personal information and digital identities – a trend that has yet to take hold.
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The Price We May Pay
It makes sense for digital currency to be used in a digital world. But with a payment system like cryptocurrencies, there are significant risks for fraud. Users can suffer anything from authority to operate (ATO), multi-account fraud, affiliate fraud, chargebacks, and more as they navigate payments.
Between 2020 and 2021, cryptocurrency theft rose 516% to $3.2 billion worth of cryptocurrency. Goldman Sachs predicted that blockchain would be critical to developing the metaverse. Unfortunately, even in the blockchain-based landscape, there are hacked wallets, laundered money, and myriad scams, which has left experts and analysts wary of this digital world.
With cryptocurrency projects being endorsed by celebrities, consumers may face confusion. From October 2020 to March 2021, Americans lost $80 million on cryptocurrency scams, a staggering 1,000% increase. As identification becomes fully digital, the challenge for businesses will be creating frictionless but effective identity checks for cryptocurrency transactions.
How Smart Are Smart Devices?
Experts predict that the metaverse will be operated with help from smart devices and augmented reality. These technologies will combine avatars, virtual reality headsets, and wearable NFTs.
While these devices can be beneficial, these wearables will collect data from users in their real lives and online lives. With an extraordinary amount of data being collected, threat actors will be even more interested in breaking in and causing data breaches of these identity passports.
As a result, there are concerns on where the data will go and how it will be regulated. Some consumers also worry about digital burglaries and how their reputation will be affected in the event of having their identity stolen in the metaverse.
As a result of these concerns, data and privacy regulations will be a leading global discussion for some time.
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How Can Business Leaders Prepare?
The best way to prevent fraud in the metaverse is to get ahead of the curve with multi-layered defense. Business leaders need to be aware of constantly changing regulations and new attacks to ensure adequate protection.
With innovative technologies like machine learning and artificial intelligence, the multitude of data businesses have can help identify and stop threat actors through device fingerprinting, two-factor authentication, and quick seamless analysis of users’ digital footprints.
The metaverse is exceptionally trendy, financially backed, and full of opportunities for businesses to change how they operate. However, leaders need to remain diligent in focusing on risk management and keeping the general public’s interest, patience, and attention. The transition to the new online world can be seamless only by staying ahead of risk.
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About the Author:
Tamas Kadar, CEO of SEON