In today’s financial landscape, fintech is an industry admired by fraudsters. Whether it’s e-trade or financial services such as banking, everything is prone to fraud. Many financial institutions experience fraud, especially during the process of account opening. These impostors steal the private information of the users and then hack into their systems. Result? Losing thousands of dollars within a few minutes. Also, if you are subscribed to an internet deal like Cox internet plans, you should be careful while browsing the web as there are many online threats that can harm you.
Top 5 Tips to Prevent Fintech Fraud
The scammers have gotten way too sophisticated with their attacks. They can ask victims to submit their private data using phishing links that provide them with complete access remotely. It’s high time to evaluate and understand the nature of these attacks and learn how to prevent them. With that said, here are five tactics for preventing fintech fraud.
#1. Use Liveness Detection Technologies
Organizations can use identity verification techniques using liveness detection technology. The software doesn’t rely on static selfie images to verify. Instead, the liveness detector requests users to move their heads in a circle, proving real and alive.
The selfie technique is now obsolete due to the lack of protection. Criminals can easily use wax figures and stolen selfies to prove their identity wrongfully. Businesses using the liveness detection technique have experienced 0.2% failure, proving it as a useful source of identification.
#2. Go For a Preemptive Approach
In the retail sector, there is a fraud scheme that allows customers to chargeback or claim refunds. In laymen’s popular language, this scam is known as “the friendly fraud”. The customers tend to charge you back even when everything is right with the order. This fraud has the potential to damage your reputation and image.
To prevent fraud in this e-trade scenario, it’s better to create some gap of time. Manage the time frame when a customer files a return claim to the bank negotiating the offer. Genuine customers will try to find a medium way while fraudsters won’t. This will help you in identifying the scammer.
#3. Choose Partners for Help
In the banking sector, KYC (Know Your Customer) and biometric verifications are tools to avoid fraud. However, smart scammers know their way out of it as well, as they are brilliant at producing exceptional quality fake documentation. If you’re smart enough, you can identify and stop the fraudsters for good.
To prevent fraud, look for duplicate documents and reexamine them. Cross-check the provided images with previous customers. You can also hire companies and partner with them to handle the verification process. They are professional at their service and can save your time and help in minimizing fraud.
#3. Aware Your Customers
It’s never too late to educate your customers and alert them of any fraud in near future. Of course, it wouldn’t be you who will commit fraud with them at any point in time. But if they won’t know the consequences, they can easily fall prey to such schemes and frauds. Result? Monetary loss and reputation management crisis.
It is always suggested to offer your customers an easy interface that can reduce ambiguity throughout. Allow them to get familiar with the tech, helping in minimizing potential harm coming their way. This will improve their overall experience and help you take the security measure to the next level.
#4. Tracking the Behavior
In order to minimize fraud in the fintech industry, it’s always a commended plan of action to track the customer. Learn their habits, and pattern of transactions, and evaluate their behavior. For instance, requests for a change of address, issuance of duplicate cards, or password reset requests.
If you know your customer never asks for frequent password resets or duplicate cards, it’s an alert for you! Never proceed with such requests or demands until sure. To avoid potential scams, make a habit to recheck with the customer by calling on their registered numbers. This can save them and your business from being a target for the potential scam of thousands.
The Bottom Line
There is a thumb rule to ensure maximum security in the fintech industry. Do you know what is that? It’s continuous improvement and enhancing security measures. The faster the financial technologies are growing, the swifter fintech frauds are rising everywhere. Especially it’s the aftermath of the pandemic, where fintech fraudulence has reached new heights.
It’s always recommended to invest in the cybersecurity of your business. Without advanced technological solutions, it is difficult to fight against scammers. As an organization, it’s your duty to ensure security and help your customers remain safe from such sad incidents.
