Financial technology or “Fintech” is a fast-paced space. Both consumers and businesses have benefited as previously niche financial services have become more widely available.
Fintech has taken multiple forms for both traditional financial businesses such as banks and everyday consumers as well. The latter have benefited from emerging payment solutions such as Apple Pay and more, while the former have reimagined their services in the form of so-called neo banks, etc.
Fraudsters have found their way into the space as well, developing their own exploits at the same speed as Fintech’s rapid evolution. Leveraging this new mixture of finances and technology to take advantage of a much larger pool of resources, fraud in fintech is forcing organizations to think fast to keep their customers safe.
The Fraud Economy
Digital fraud has gone from being a solo occupation to being a thriving economy of its own. This fraud economy is a self-contained ecosystem of cybercriminals who buy and sell the tools and intel needed to take advantage of both online businesses and the customers they serve.
Just like any other growing industry, a complex assortment of laborers, service providers, and pricing structures exists for fraudsters to choose from. Illegal marketplaces normally hosted on the dark web make engaging in these illicit online activities fairly simple.
Fraud in Fintech
Fintech has found itself under attack from fraudsters who are leveraging increasingly sophisticated techniques to get their way. Generally, they fall into three main categories: content abuse, account takeover, and payment fraud.
Phishing can be used to manipulate both consumers and organizations into handing over sensitive information. Once obtained, cybercriminals put this information to use in synthetic identities and other forms of fraud, passing the consequences of their actions off on those they impersonate.
Companies must race to keep up with these phony identities without disrupting the user experience for their growing base of legitimate customers. With 2 billion people around the world estimated to be unbanked, the use of Fintech services is likely to keep rising, making this form of fraud even tougher to detect.
There are numerous ways for fraudsters to attempt account takeovers and gain access to valuable information or funds stored therein. Among these are time-tested methods such as credential stuffing and password sharing. For the former, criminals try multiple combinations of passwords and usernames or email addresses until one of them works, then sell the account or use it themselves.
Identity fraud can be carried out by criminals entirely online or even in person, using a variety of malicious tactics. Card not present transactions handled online make it easy for criminals with stolen payment card data to use their victims’ funds. Fraudsters may also leverage pilfered identities to apply for lines of credit with multiple organizations, ultimately damaging their victims’ credit scores in the process.
Fintech is here to stay, bringing financial services closer to consumers and businesses everywhere. However, as it does so, it also brings its attendant fraud risk along for the ride. That is precisely why you should take the fight against fraud seriously.
Antiquated security methods are no longer capable of keeping up with emerging fraud risks. Cybercriminals are not attacking along a single line or targeting just one type of vulnerability; they are going after anyone they can from every angle. That’s why you need a robust solution.
Intellicheck’s ID verification platform puts your customers’ safety and privacy first without sacrificing convenience or efficiency. You can count on ID verification in under a second with 99.99% accuracy. Scanned documents are matched to selfies to ensure your customers are exactly who they say they are and document-specific security features are parsed for details that cannot be faked.
For financial services with complex existing infrastructure, Intellicheck offers frictionless integration options, including a browser-based portal that is especially easy to implement.
Fintech continues to evolve, becoming more and more part of daily life. And as it does, so will fraud. That’s why partnering with Intellicheck now is the best way to protect your organization and your customers.