Articles

thefintech.info

WHY THE COST-OF-LIVING PROBLEM IS GIVING SCAMMERS A NEW CHANCE

Continuous advancements in fraud prevention software are needed to protect consumer funds as cybercriminals continue to adapt to new defenses imposed by banks, merchants, buyers, and processors. reason given. It’s a cat and mouse game. The goal of the game? Find and exploit the vulnerable link in the chain of defense.

Advanced technologies like machine learning have been deployed to go beyond humans by using past data to predict the activities of fraudsters, which most of them do. But the pandemic has left consumers vulnerable to economic instability, which in turn presents bright opportunities for criminals to exploit. Today, in the midst of a cost-of-living crisis, criminals don’t hesitate to exploit the weakest link in the chain: the consumer.

Evolve or lose: How fraudsters are adapting

First, let’s see how cheaters adapt stronger fraud defenses to exploit human connections. Traditionally, fraudsters have used unauthorized methods of fraud, where – according to the Federal Reserve’s Fraud Classification model – the fraudster uses a tool, such as performing unauthorized payments by card or control of a consumer’s account. Unauthorized fraud depends on finding a weak link in protecting a consumer’s account, such as a weak password, or breaking into a system to find a loophole in the defense.

On the other hand, an authorized fraud or scam is classified as manipulating the account holder in some way – whether by forging a relationship with them, impersonating a third party, or selling fake products or services. pose. This is often referred to as social engineering.

A new environment for new fraud methods

Identity theft scams are the most lucrative way scammers can adapt. UK Finance reports that in 2021, £583 million was stolen from UK consumers through authorized methods, including £214 million through identity theft scams.

During the nationwide shutdown caused by the pandemic, consumers turned to e-commerce for purchases, while governments responded by supporting people with COVID-19 relief packages. Scammers perceive people’s vulnerability as the weakest link and send fake text messages with malicious links to consumers, asking them to pay to have their packages delivered safely. The same goes for bailout packages, where scammers pose as the government and ask for bank details. In recent months, the cost of living crisis, caused in part by economic sanctions against Russia, has caused household spending to increase when it comes to paying for essentials like food. products and energy bills. The UK alone has seen a staggering 40-year high annual inflation rate of 9.4%. Many countries have relief programs to help consumers pay for heating and fuel increases. This has created a new opportunity for scammers to target people who owe energy suppliers, posing as debt collectors or government aid programs.

The rise of money mules

With the cost of living rising and consumers increasingly scrambling to pay essential bills, they are not only vulnerable to fraud but also employed as financial mules. The money the scammer has defrauded from the victim will be transferred to the account of a financial mule. Criminals often use social media to target consumers with ads to make a quick buck. Often, they can convince someone to accidentally put £1,000 of illicit money into their account by letting them keep £100. Usually, it’s the financial mule that gets taken away, not the scammer.

When can we put an end to the game of cat and mouse?

Cheats continue to adapt to the weaknesses that the world around us exposes. Everyone, even the most tech-savvy generations, is at risk. In places where there is less regulation of allowed scams and scams, than what currently exists for fraudulent practices, consumer education and vigilance are just the first steps. First to close the gap. Preventing scams will be a global, cross-industry effort just beginning.

thefintech.info

HOW CAN FINTECH WIN IN THE RED OCEAN?

From the first ATM in the 1960s to the rise of smartphones that led to mobile banking in the 2000s, and now the digital age bursting with super apps and fintech, The financial industry has evolved to improve the customer experience. While customers may choose a financial product or service because of its functionality and features, it is the user experience that keeps them engaged.

With the advent of thousands of fintech, customer expectations and financial needs have evolved. COVID-19 has fueled mass fintech adoption for consumers, with 88% of US consumers using technology to manage their finances by 2021. Remittance and payment services technology has most adopted by 75% of global consumers in 2019. With such growth, traditional offers are no longer enough. Consumers now need more personalized technology-based products, which forces fintechs to quickly adapt.

Offer streamlined and thoughtful API products

As the fintech industry grows and becomes more promising, more and more regulations and regulatory requirements await future industry players. In the event of new regulatory compliance changes requiring application system updates, customers will want to know how fintech providers plan to ensure that the user experience remains smooth.

That’s why many companies choose APIs as a simple solution to streamline their processes. APIs allow companies to easily integrate without making significant changes to their ecosystem and avoid confusion for customers following system updates. The advent of APIs has completely reshaped the future of the financial services industry by enabling partnerships between banks, fintech companies, and other financial service providers, such as financial planning. accounting or consulting. Depending on the needs, different API functions can be added to the enterprise system flexibly. These are the building blocks used to build solutions that include foreign exchange, repeat or one-time payments, and domestic or cross-border currency payments. In addition, a streamlined system speeds up operations through efficient machine communication, reducing losses due to human error. With APIs, companies can spend more time and resources creating more meaningful connections with customers.

Provide holistic solutions by tailoring offerings to meet customer expectations

In the past, traditional finance required physical contact to manually enter customer data and perform research to develop a custom solution. This time-consuming method is expensive and has been classified as a “premium service”. But now, digitization and modern technology have made hyper-personalization and integrated finance accessible to everyone with just a few clicks.

As the industry grows with more diverse customer profiles, businesses and organizations need to present more diverse products and services that meet different customer needs. This forces fintech providers to adapt to dynamic market conditions. Accessing customized solutions that meet specific customer expectations can make the fintech experience even more intimate.

In addition, fintech providers continue to focus on data-driven solutions. Eighty-six percent of banking consumers said they are willing to share their data for a better, more personalized experience, demonstrating that financial services such as Banking Services (BaaS) ) offer an unprecedented opportunity to collect data through their ecosystem. Major industry players are using new ways to collect user data and process that data to create better interaction models that will help differentiate their solutions for businesses and customers. . The fusion of cutting-edge technologies, global networks and financial experts can pave the way for fintech providers to create a complete suite of solutions on demand and gain trust.

Make digitalization more ‘human’

The human connection does not have to fall victim to smarter technology. It is important to support technology with a personal touch, encourage loyalty, and nurture relationships with customers.

Technology solutions that help businesses manage customer expectations and experiences. Meanwhile, they can also help key decision makers understand where and when human assistance is needed based on the number of user interactions with the technology. As a result, a business can leverage technological tools to create hyper-personalized experiences. Accessing quick support from a designated contact or a dedicated account manager greatly improves the user experience, especially when customers encounter difficulties. A balance between digital tools and human support is needed to retain customers and reduce disruption.

thefintech.info

WHY THE FINANCIAL SERVICES INDUSTRY NEEDS TO EMBRACE CONFIDENTIAL COMPUTING

While financial data has always been considered sensitive, the growing number of companies working with sensitive data has brought renewed attention to the issue.

Financial institutions are among the most targeted by hackers due to the large amount of critical customer data they handle. Any loss of personally identifiable information (PII) can lead to lawsuits, fines, and irreparable brand damage.

For this reason, the financial services industry is often hesitant to share data and collaborate. With the rapid rise of digital fraud since the start of the pandemic, it’s time for financial institutions to reevaluate their options. Confidential Computing is a new approach to data encryption that helps the financial industry protect PII and fight digital fraud through collaboration.

The value of secret computation

Although protocols exist to protect data in transit (in transit over a network connection) and at rest (in storage and databases), only secret computation solves the security problem. important data by encrypting the data in use – during processing or execution.

Sensitive data is handled in hardware memory called “enclaves”, preventing hackers from accessing the data, even if the infrastructure is compromised. This allows businesses to run sensitive applications in the cloud or other hosted environments, as the risk of malicious or unintentional breaches is essentially eliminated.

The evolution of digital fraud

With the outbreak of the pandemic in 2020, financial institutions rushed to develop online services to make banking services accessible to limited consumers. The flip side of this digital shift is creating new opportunities for scammers to steal PII. According to a recent study by the Identity Theft Resource Center, 1.5 billion PII entries have been exposed in the past three years alone.

The availability of PII creates a number of opportunities for cybercriminals. They can use complete sets of customer information to open new accounts or put together different pieces to create entirely new profiles, known as composite identities. The 2021 Consolidated Identity Fraud Report found that US banks lost $20 billion in 2021 due to aggregate identity fraud (SIF).

Whether it’s using one person’s sensitive information or an aggregate of many, PII is the key that criminals use to open up a wide range of fraud opportunities. Fortunately for financial institutions, confidential computing not only protects PII from the risk of exposure but also enables a new approach to combating digital fraud – sharing fraudulent profile information. between banks. PII Protection and Anti-Fraud

When scammers steal PII, they use it to create fake accounts, borrow money, and open multiple lines of credit. Whichever approach they take, they can reuse the same information to commit fraud at multiple banks, none of which is wiser.

Why? Because even if financial institutions suspect or find out that PII is fraudulent, they cannot report it to their peers at competing banks for fear of breaching confidentiality laws, leaking data, or causing fraud. or put itself at a competitive disadvantage.

This is why confidential computing and its ability to encrypt data during processing or execution are so important. It allows financial institutions to check information for signs of fraud and share their findings anonymously, without the risk of exposing PII in the process. This approach encourages financial firms to cooperate in the fight against digital fraud, eliminating duplication of effort and making it easier for regulators and enforcement agencies.

The technology has been successful in industries like healthcare, and similar success must now be replicated in financial services to protect PII. It has the potential to be the driving force behind improving digital fraud detection and reversing the rise of digital fraud.

thefintech.info

5 STEPS TO INCREASE DIVERSITY, INCLUSION IN THE FINANCIAL SERVICES INDUSTRY

While the financial services industry is viewed as lacking significant diversity, many studies have shown a strong business case for promoting diversity and inclusion. A recent study, The Journey of African American Insurance Professionals, offers some practical suggestions for recruiting and retaining African Americans, a group that is underrepresented in the industry.

The study, conducted in collaboration with the National African American Insurance Association and Marsh, resulted in the following recommendations:

  1. Establish relationships: Beyond conventional recruiting on college campuses, employers should establish ongoing relationships with key faculty members, business and community leaders, and other influential persons who can increase awareness of insurance industry career prospects.
  2. Tap into talent pools: Employers should tap into the talent pools in African American professional groups, for example, the National African American Insurance Association, Executive Leadership Council, National Black MBA Association, and National Association of Black Accountants, to broaden their recruitment efforts. Smaller businesses should tap into African American talent pools to enhance their competitiveness and improve their growth potential.
  3. Leadership commitment essential: Senior leadership commitment and engagement are essential to the substance, vitality, and sustainability of diversity and inclusion in the workplace. Recognition of, and respect for, different perspectives must be signaled from the top of an organization and be a strategic priority. Senior management engagement is a crucial element of success, including in such areas as sponsoring and mentoring; rectifying inequities in compensation and promotion; holding others accountable for diversity goals; promoting lines of communication that expose a diversity of ideas, experiences, and personalities; encouraging employees to own their careers; and opening doors for individuals to contribute.
  4. ERGs: Develop and Sponsor Employee Resource Groups (ERGs). ERGs should have a positive impact but must be proactive entities that bring employees together to address real concerns. ERGs should be safe places where overlapping objectives can be met, such as creating positive social environments where individuals can express themselves, and providing training on hard/technical skills (such as certifications and knowledge transfer) and soft/interpersonal skills (such as leadership, presentations, and mobilizing others). Industry organizations that encourage this type of “risk-taking” will benefit from heightened employee morale and productivity.
    *Build informational pipelines that inform prospective hires of the significant opportunities within the industry. There are obvious gaps in knowledge and awareness about the industry itself and where it is headed in relation to the application of data, analytics, and new technologies, which may constrain insurance from being a top choice.
  5. Mentor, Coach, and Sponsor. Formal coaching and mentorship programs and informal mentoring relationships should be explored to determine what fits best in a company’s organizational structure. Companies in the insurance industry should foster dynamic mentoring and coaching cultures and engage external experts, when necessary, to train mentors on the most effective coaching techniques and to enhance the quality of the relationships

Increasing exposure

Serving diverse communities has been and will continue to be a great source of sales growth for insurance carriers, senior development manager with New York Life Insurance Company’s Brooklyn General Office. Generally speaking, he added, members of these communities typically don’t have adequate access to financial advice, and are, on average, more likely to be under-insured or uninsured.

The following are some of the steps that an organization can take to increase its exposure to diverse communities, according to Agha:

  • If there are agents currently in your organization that are members of diverse communities you wish to target, develop them to be ambassadors of your organization to the communities they serve and create more “word of mouth.”
  • Invest in in-language training, and culturally relevant tools and marketing material. “Often in our industry,” “what’s available in English far outpaces what’s available in other languages. People from diverse communities need to feel a sense of belonging and relatability with the organization they work with.”
  • Make sure your organization’s website and other electronic communications channels have culturally relevant content, including in-language content where possible.
  • Support sponsored content and ads on popular local papers, podcasts, and TV shows, as well as conduct educational seminars in local communities. This content should be centered on the importance of considering insurance as part of preparing for one’s financial future, as well as on how people can pursue careers in our industry.
thefintech.info

3 FACTORS THAT AFFECT HOW YOU SERVE YOUR SMALL BUSINESS BANKING CLIENTS

Small businesses make up more than 99% of the economy and are responsible for 65% of new job creation. In our opinion, there’s nothing “small” about that.

Many financial institutions (FIs) disregard small business owners despite these statistics. Only 25% of small-to-medium sized businesses (SMBs) have awarded relationship managers a “very good” rating since COVID-19, according to a recent survey by The Financial Brand. Even worse, according to research by Accenture, 42% of SMBs think alternative providers can give better service than established banks.

Part of the problem is that “small business” is a broad term, which means that a one-size-fits-all approach can’t serve every small business owner. Small business banking needs can vary based on a number of factors, which requires that FIs have flexible and scalable technology to meet those needs. These factors include:

1. Digital appetite and aptitude of the owner

The diversity of small business owners in the United States is reflected in the breadth of their digital appetites. One small company owner might wish to start their loan application online to discover what they are eligible for without speaking to anyone. A mom-and-pop startup’s co-founders might decide to arrange a branch visit so they can discuss their alternatives. The owner of a long-running company who has a good working connection with their banker could wish to call them at the same time to check in regarding a new product line they’re interested in launching.

2. Maturity/size of the business

A company’s requirements become more complex as it expands. In order to handle their payables and receivables, a successful small business owner may need to acquire treasury services. They may also be interested in investigating new financing possibilities as they grow their market. On the other hand, a smaller business owner could be willing to investigate options like an SBA Express loan.

3. Nature of the transaction

Many participants in the banking industry, such as alternative lenders, catering to the transactional needs of small business owners. However, in a perfect world, technology suppliers would simultaneously take into account the requirements of the FI, the lender, and the small company owner. FIs are best positioned to offer tailored advice and dependable service to their SMB clients when all essential parties are given the opportunity to cooperate in a balanced manner.

Small business owners have at least one trait despite their numerous diversity. They are the only ones who truly understand their business, and as they move forward in their entrepreneurial path, they desire encouragement, consolation, and individualized advice. They want a banker who understands their situation before they even tell them to reach out to their FI.

thefintech.info

WHY ARE ESTABLISHED BUSINESSES INVESTING MILLIONS IN FINTECH IN 2022?

Fintech is a vast market. It can disrupt the traditional banking system and create new opportunities for financial services. In the past decade, we have seen an increasing number of startups focusing on this industry, leading to many more disruptions and innovations in how we handle our finances.

Courses in fintech are the newest big thing. The combination of technology and financial services is referred to as fintech. It has become increasingly well-liked over the past few years and is now an essential component of contemporary banking. Fintech businesses are transforming how consumers do their banking.

By giving clients more options, better customer service, and reduced pricing, they achieve this. Although a business called Innovate Finance first used the term “Fintech” in 1999, it wasn’t until 2008 that a Fintech startup, Square, significantly disrupted a sector. Big businesses are making investments in fintech.

But it may be a surprise to know why these traditional firms are spending millions on these emerging technologies. The six most common reasons are:

  • Investing in digital transformation to stay relevant
  • Saving costs by using Fintech to outsource services and reduce expenses
  • Facilitating the customer experience with better service
  • Improving workflows and processes
  • Increasing the speed of innovation and development through partnerships with startups and innovators
  • Improving organizational efficiency

What Brought These big Players to the Table?

Traditional financial services companies are increasingly searching for novel revenue streams and competitive advantages. Fintech investments are one of the greatest methods. The amount of money that the major players have invested in Fintech companies over the past two years is unparalleled.

Big participants in the traditional banking industry are increasingly interested in the topic of fintech investments. Along with Fintechs, established businesses are collaborating to provide fresh goods and services. These businesses are aware that if they want to remain competitive and relevant, they must embrace innovation.

Fintechs are receiving funding from organizations like JP Morgan and Goldman Sachs. They either purchase full ownership of companies with a bright future or make strategic investments in them.

Why are Large Firms Investing in AI & Robotics?

The trend of large companies investing in AI and robotics has been developing for some time. The quick rate of technology development, which is always altering how we live, work, and interact, is the cause of this.

While some businesses use AI to boost productivity, others see it as a method to maintain their competitiveness. The typical business will invest in artificial intelligence (AI) or robotics to enhance its customer experience, boost productivity, and cut expenses. These investments can be expensive, but there are several ways to make them without going bankrupt.

Because they worried about how it might impact their bottom line, huge companies were previously hesitant to invest in new technologies. These businesses understand that, given the current rate of change, they need to invest in these new technologies to stay competitive and maintain their market share.

What the Future Holds for These Major Investments

A lot of individuals are interested in the future of investments. Although predicting the future is difficult, there are some tendencies that we may observe to make an attempt.

Fintech investments in the future will be more varied than they were in the past. As a result of rising investment, non-traditional Fintech industries like bitcoin and blockchain technology will face more competition.

Future investment opportunities will differ as a result of technological advancements. By offering financial guidance and forecasting market trends, artificial intelligence has already made an impact on the investment world.

The Potential of Investment Opportunities in Fintech

Fintech is a rapidly expanding industry that has attracted considerable investment prospects lately. With new businesses starting up and existing ones adding new services, the industry’s growth and innovation potential are still enormous.

There are several opportunities for investors to invest in this market, from directly supporting new startups and contributing capital to established businesses with potential futures to indirect investments through Fintech-focused funds.

There are many methods to get involved in the Fintech sector. You can do this via consulting, serving as a board member or advisor for a business, or both. You can enroll in Fintech courses in India to get started on the path; these courses will provide you with a thorough understanding of industry trends and will get you ready for a career in the Fintech sector.

1 2 38

Videos

Bybit NEXT LEVEL 2022

The crypto industry experienced a downturn in 2022, catalyzed by events such as the LUNA crash and rising inflationary pressures. Naturally, this begs the question — When will the bear market end, and how do we move forward?

1 2 48

Whitepapers

Infographics