The fintech industry has grown rapidly over the past few years, providing new and innovative ways for people to manage their finances. Fintech platforms have brought great ease and completely transformed how we perform transactions.
However, with this growth comes an increased risk of fraud and security breaches. Fraudsters and bad actors constantly seek ways to exploit fintech platforms and run scams on them and their users. Yet, building trust and safety in your fintech app is crucial to gaining and retaining users. This explains why 67.57% of the total verification checks performed in 2022 came from the financial sector. In this article, we'll explore some best practices for building trust and safety in your fintech app, from implementing strong security measures to creating a seamless user experience.
Overview of common fraud and security threats faced by Fintech Apps
While bad actors deploy different means to perform fraud schemes, the three methods that fintech platforms often deal with are farmed identities, account takeovers, and counterfeit documents. These fraud attacks have become more advanced and difficult to detect and guard against with manual verification procedures. Fraudsters can now use sophisticated technology to create deep fakes and perform identity farming. They can also manipulate document information with graphics processing to create high-quality forgeries that are difficult to detect.
Even though not all fraudsters have access to these advanced technologies, they will become more accessible in time, making the fight against fraud harder.
Naturally, as fraud advances, central banks and other bodies that regulate financial institutions will develop more regulations and engage more with fintech businesses to establish more anti-fraud solutions.
Step to Prevent Fraud and Build Trust in Safety in Fintech
The level of trust and safety in the fintech industry depends on many factors, including the existing regulations and the ability of companies to adapt and respond to emerging risks and threats.
However, you can take the following steps to enhance your platform's trust and safety.
Customer education is probably the lowest-hanging fruit you can utilize to strengthen your platform's safety because it requires the least resources to execute. Fraudsters often prey on customers' ignorance and trick them into giving out sensitive information like PINs, log in details, and OTP codes.
You can boost security by educating customers on how to protect their confidential data, how fraudsters run scams and the steps they can take to stay safe. Educating customers is also a great way to build trust because it shows how proactive you are about safety and security.
Webinars, blog posts, social media posts, and youtube videos are mediums you can use to educate customers.
You can detect financial crimes by using a transaction monitoring system. It allows you to monitor transactions like deposits, transfers, and withdrawals. Also, real-time transaction monitoring systems help you stay ahead of fraud by giving them insight into suspicious customer activity and behavioural patterns.
With transaction monitoring, you can detect and stop potential fraud and money laundering activities before they occur.
- Verify Customers When Onboarding
Customer onboarding and identity verification should go together. Verifying customers at the start of the onboarding process reduces the risk of fraudsters gaining access to your fintech platform.
Some businesses don't verify customers at onboarding because they want to reduce the friction users experience to avoid high abandonment. However, you can strike a balance between your platform's safety and customer experience by deploying seamless digital identity verification methods and splitting the KYC process into tiers.
- Set up multi-factor authentication (2FA)
2FA is an extra layer of security that you can deploy to make your platform more secure. You can use different types of 2FA, like passwords, PINs, secret questions, OTPs, and biometric verification.
You can implement 2FA at two points in your product; when the user tries to log in and when the user tries performing a transaction. Authenticating users at login and at the transaction point makes it more complicated for criminals to bypass and increases your platform's level of security.
- Ensure Regulatory Compliance
Apart from avoiding fines and jail time, there are others benefits you get by complying with regulations. It improves your brand's reputation and builds trust with customers. Implementing these KYC and AML requirements also tightens security and helps cut off access to fraudsters.
Also, customers will lose trust and confidence in their money and personal data being safe with you if they observe that you are flaunting industry regulations
2FA and identity verification methods like document, address and government ID verification already exist, so why add liveness checks? Because they are difficult for fraudsters to bypass and forge.
BVNs, NINs, documents, and addresses can be forged. However, liveness checks use AI-powered facial recognition technology, making them a more full-proof and secure solution. You can combine liveness checks with other identity verification methods to increase the overall security of your fintech app.
Ideally, it would be best if you implement liveness checks at the start of the customer onboarding process.
Secure Your Fintech App With Dojah
The fintech industry is set to reach $306 billion in 2023. With so much money moving around, fraudsters will do all they can to exploit as many fintech platforms as possible and steal as much as they can. However, you can stay clear of fraud and secure your platform by partnering with Dojah.
With Dojah, you can easily access your customer's Financial data, Biometric data, Government data, Telco data, AML data, and more for seamless verification and onboarding. You can also explore multiple integration options via our APIs, widgets, and no-code tools to build custom onboarding flows for all stages of your customer journey.
Start verifying your users with ease today. Contact us if you have any questions or schedule a demo session.
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