Making Passkeys Bank-Grade: The Missing Ingredient

This fourth blog in a five-part series that explores the current state of passkeys and why enhanced implementations, what we call Passkeys+, are essential for meeting the security and compliance demands of bank-grade use cases.

You can read the other three posts in this series here: 

• Part 1: The Passkey Shift - Passkeys Inevitable Triumph over Passwords
• Part 2: Convenience vs. Control: The Problem with Synced Passkeys
• Part 3: Passkeys Alone Are Insufficient for Financial Services

TL;DR

• Passkeys are a major improvement over passwords, offering a seamless, phishing-resistant login experience.
  
  
• But regulators demand more: multi-factor authentication, control, and verifiability.
  
  
• Cloud-synced passkeys lack device binding, making them a poor fit for high-assurance environments.
  
  
• Ideem’s ZSM (Zero-Trust Secure Module) generates its own key pair and cryptographically links the passkey to the authentication flow.
  
  
• This enables device binding, auditability, and local policy enforcement—making passkeys bank-grade.

Passkeys Are Progress, But Not the Finish Line

Passkeys are one of the most important security upgrades in years. Backed by Apple, Google, and Microsoft, they offer a fast, phishing-resistant login experience that’s far superior to passwords. In 2024 alone, adoption surged across consumer apps, with usage increasing by over 400% (Dashlane, 2024).

But for financial services like banking and payments, better doesn’t mean sufficient. These sectors must prove multi-factor authentication, maintain direct control of their authentication infrastructure, and satisfy strict audit and compliance obligations, requirements passkeys alone weren’t designed to meet.

The Ideem Approach: Embedding Control Inside the Device

Ideem’s ZSM (Zero-Trust Secure Module) is purpose-built to address this gap. It introduces a hardware-grade software, tamper-resistant security layer that enhances the standard passkey model in three key ways:

1. Independent Key Generation

Unlike synced passkeys that are generated and managed by platform-owned vaults, the ZSM creates its own cryptographic key pair locally on the device. This key never leaves the secure enclave. It becomes the foundation for device-bound authentication. It also refreshes after a short period of time decreasing attack surface area. 

2. Cryptographic Linking to the Passkey

When a passkey is used, Ideem’s ZSM links its own private key to the authentication flow, embedding proof of device possession into every sign-in. This ensures that the credential is not only tied to a biometric, but to a known, verified device as well.

3. Deterministic Verification

Each ZSM instance is unique and cryptographically verifiable. Institutions can confidently identify and authorize the originating device, enabling trusted device policies, step-up requirements, and account recovery controls.

What This Enables for Financial Services 

With Passkeys+, powered by Ideem’s ZSM, financial services gain the assurances they’ve been missing from standard passkey implementations:

• Device Binding
  Tie credentials to a specific device and cryptographically verify its use.
  
  
• Multi-Factor Compliance
  Meet SCA, PSD2, and MAS guidelines by combining biometrics, possession, and cryptographic proof.
  
  
• On-Device Trust Anchor
  Don’t outsource identity to a third-party vault, control it locally with tamper-proof hardware-grade software.
  
  
• Audit Trails & Policy Enforcement
  Maintain logs of device usage, enforce custom risk policies, and step up authentication as needed.
  
  
• User Experience That’s Seamless
  No passwords, no OTPs, no hardware tokens—just secure, compliant login that feels invisible.
  
  

Conclusion

Passkeys have taken us far. But for financial services, the road doesn’t end with convenience—it must end in control, compliance, and cryptographic certainty.

Passkeys+, backed by Ideem’s ZSM, delivers the missing layer that makes passkeys truly bank-grade.

Sources

• Dashlane: Passkeys 2024 Adoption
  
  
• Apple: Platform Security Overview
  
  
• Google: Passwordless and Passkey Updates
  
  
• FIDO Alliance: 2024 Enterprise Adoption Report
  
  
• MAS Notice PSN01: Cyber Hygiene Requirements
  
  

EBA PSD2 Guidelines: Security of Internet Payments