Building trust in fintech: Collaboration and robust practices

In the fast-growing world of fintech, successfully managing fraud poses a crucial problem for startups. In reality, in response to a report by the World Economic Forum, the worldwide value of cybercrime is predicted to achieve $10.5 trillion by 2025. In Africa, the monetary sector is probably the most focused by cybercriminals, accounting for 60% of all assaults and ensuing in losses estimated at $4 billion yearly, per a  report by IDC.  

Per 2023 Africa Financial Industry Barometer, developed in partnership with the Africa Financial Industry Summit and Deloitte, 97% of surveyed executives at prime monetary establishments in Africa take into account cybercrime a big menace. While sustaining a seamless consumer expertise is important for development, many fintech startups wrestle to implement fraud management measures with out hindering their clients’ satisfaction. Fintechs are notably susceptible to fraud, as they’re typically new and haven’t but developed the robust safety measures that bigger monetary establishments have.

Fintechs and different monetary establishments want to speculate in constructing robust safety measures into their merchandise. They want measures geared toward combating hacking and different safety threats, in addition to common safety updates.

“The importance of continually updating technology to effectively monitor and assess fraud is essential, as it suggests that partnering with digital KYC providers can assist fintech companies in mitigating fraud effectively,” stated Daniel Ade-Ojo, a fraud intelligence specialist at Moniepoint in the course of the newest version of Inside Identity—a digital occasion sequence by QoreID, in partnership with TechCabal. He emphasised the necessity for fintech corporations to determine a robust safety system by leveraging standardized and superior applications.

In 2022 alone, there have been over 100 million circumstances of identification theft in Africa, ensuing in losses of over $10 billion. Esigie Aguele, the co-founder and CEO of VerifyMe Nigeria, make clear the prevalence of identification fraud in Africa and the need of constructing up-to-date applied sciences to counter this situation. “Collaborating with KYC specialists instead of developing in-house KYC products to effectively combat identity fraud is important,” he stated.

Similarly, Henry Ayisi Mensah, the district police commander in Oyibi, Eastern Region, Ghana, emphasised the importance of cross-checking for duplicate paperwork throughout buyer purposes. He careworn the significance of collaborating with specialised KYC service suppliers to successfully mitigate monetary fraud.

However, there’s additionally a spot for prioritizing regulators when investigating fraud, resembling compliance, transparency, and integrity. Stanley Jacobs, VP of the Fintech Association of Nigeria, emphasised efficient communication and accountability for fintech corporations as they develop, and as the chance of fraud and cyber-attacks will increase. He highlighted the necessity for behavioral monitoring, blacklisting administration, and complete KYC and buyer identification practices to determine and stop the infiltration of recent malicious purposes throughout account opening.

Partnering with KYC suppliers which have the experience will help fintech corporations mitigate fraud and confirm the identification of shoppers to assist stop fraudulent transactions. Anthony Onyangbo, the pinnacle of world credit score at Lipa Later, affirms this place by proposing the outsourcing of KYC processes to specialised service suppliers as a viable strategy for fintech corporations to counter monetary fraud.

The significance of a collaborative strategy and robust safety measures to safeguard the fintech business can’t be overemphasized. Fintech corporations and monetary establishments ought to prioritize adopting an end-to-end fraud technique. This technique needs to be seamlessly built-in into their merchandise to supply a clean buyer expertise, whereas additionally implementing identification controls, fraud discount measures, and buyer safety.

Inside Identity goals to foster knowledge-sharing and collaboration throughout the fintech and KYC industries by encouraging discussions on proactive safety measures, collaboration with KYC specialists, and staying abreast of technological developments.