4 Ways FinTech Firms are Preventing and Detecting Financial Frauds

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4 Ways FinTech Firms are Preventing and Detecting Financial Frauds

The FinTech sector has seen unprecedented growth over the last few years in India and across the world. Laden with opportunities, this trend has grabbed the attention of stakeholders as well as that of fraudsters who keep unearthing innovative and cunning ways to break into the system and make a quick buck.

The Reserve Bank of India (RBI) annual report for the FY 2019-20 has revealed that the number of bank frauds has surged over 2X in the year ended June 2020.

The total worth of these reported bank frauds was about Rs. 1.85 lakh crores.
Such statistics have compelled the FinTech companies to equip their existing strategies with advanced technologies such as robotic process automation (RPA), artificial intelligence (MI), machine learning (ML), to name a few.

Here are the key areas wherein FinTech companies are gearing up to detect and prevent fraudulent activities with advanced solutions.

1) Advanced Transaction Monitoring and Instant Notification

Banks and non-banking financial companies (NBFC) are using FinTech products equipped with AI and ML algorithms to monitor customers’ transactional patterns. If any transaction seems unusual, it will be allowed only after further authorization from the customer. 

Doing so, even if an imposter exploits customers’ stolen identity to transact some money – based on the geography, kind of the transaction, time, and the amount involved – the BSAs will trigger additional authorization before enabling the transaction.  

 

2) Digital Footprint Data during Customer Screening

Conventionally, the products used by financial institutions to screen a customer check the creditworthiness of the prospective borrower by getting one’s CIBIL score from the credit agencies.

But India is home to a massive unbanked populace, who do not have much financial history. New borrowers can use digital footprint data as nearly everybody has a smartphone and performs online transactions. 

FinTech products utilized for customer screening are leveraging data analytics, data mining, and ML to utilize the digital footprint data and compare it with a fraudster’s approach to calculate a more precise creditworthiness score.

 

3) Avoid Payment Frauds with Biometrics and Multi-factor Authentication

Doing purchases and payments with stolen debit/credit cards or digital banking credentials is becoming prevalent. Although many payment systems utilize additional authentication such as a one-time password (OTP) for all card transactions, it is not always risk-free.

Also, when the mobile phone is stolen, it becomes easy for the conmen to commit financial fraud. This is where online payments come into play as a game-changer.

With online wallets, there is no need to expose one’s debit/credit cards to anyone. Also, online payment systems can utilize advanced biometrics that cannot be forged to authorize the transactions besides the usual authentication methods.

4) Automated Bank Statement Analyzers during KYC

Manually going through the pages of bank statements of potential borrowers is monotonous and liable to human errors or, often, even subjective biases. For this, many FinTechs are creating dynamic rule-based automated bank statement analyzers (BSA) solutions.

Some of the parameters where automated BSAs can look for in the bank statements include cheque returns, charges and penalties, circular transactions, and equal debits and credits, among others.

Change is the Only Constant

Fraud detection is an ongoing process. Like how the fraudsters keep showing up with newer ways to outwit the financial services, the FinTech realm is also maturing with the advent of innovative solutions using advanced technologies including RPA, AI, and analytics to avoid and detect frauds.

As technologies advance, financial services that bank on them will also level up and become more effective to the financial sector to create a digital fortress that is secure and safe from fraudsters.

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To know more and to apply for the course, visit Miles Education today.

116 thoughts on “4 Ways FinTech Firms are Preventing and Detecting Financial Frauds”

  1. H.Arvind kumar

    4 Ways FinTech Firms are Preventing and Detecting Financial Frauds this article was very useful for me.

  2. Financial Frauds are very common nowadays. Everyone should be aware of how to prevent them. This blog is very informative.

  3. Ahmed Ali Akbar Blue

    In the current world we see that there is tremendous growth in digital currency as well as finance, this has also given opportunity for more unethical practises and thefts to take place. Some one had to stand against these pactises and I am happy to see that Fintech companies are taking various measures and are coming up with various practises to outwit these thefts !!!

  4. Pingback: 4 Ways FinTech Firms are Preventing and Detecting Financial Frauds – Site Title

  5. Very Informative Blog!
    The 4 Steps gives us the deep understanding of how these firms are preventing and detecting the financial frauds.

  6. It good to know that there has been detected the way of finding frauds , as there were many scams.
    Fintech firms are preventing advanced transaction monetoring and instant notification, biomaterics, automated bank statement,digital foot screeing. It seems good that know ther are very less chances of fraud

  7. Miles Education up-skills students and professionals to help them be future-ready and enable their career progression. With Miles you can earn your CMA, establish global credibility and avail assured placements at one of the Big 4 or MNC’s in India.

  8. Christeena M S

    Miles education is a good academy which provides quality education to all the needed students. And gives all the updates about the courses. Also gives motivation to do the course.

  9. Aleena mol reji

    As we know today the financial frauds are increasing,in this situation fintech firms are giving a good ways to prevent it,it was very useful and appreciatable.

  10. I’m glad I read this blog because I feel I’ve gained some knowledge about fraudulent acts in financial sector and how to prevent them

  11. Abishek Adithya R

    The firm categories of Miles Education expect their headcount to increase in response to AI over the next two years which is been very useful for the generation and for the society and for the upcoming students to increase their skills and we can seek jobs through this miles Education.The FinTech sector has seen unprecedented growth over the last few years in India and across the world. Laden with opportunities, this trend has grabbed the attention of stakeholders as well as that of fraudsters who keep unearthing innovative and cunning ways to break into the system and make a quick buck.

  12. im glad that i came to know about the fraudulant acts and this was very much helpfull to prevent those frauds

  13. The techniques used to reduce and prevent frauds are really amazing. KYC is the best option to choose when it comes to detection of frauds.

  14. SIYA MARIA JAMES

    This blog help lot to understand about the advance solution of RBI. For me this blog was very informative.

  15. Twinkle Johnson

    I come to know about key areas where in FinTech companies are gearing up to detect and prevent fraudulent . This was very informative

  16. This blog is informative. Which includes all the methods for detecting financial frauds.I think I can learn more from this.

  17. This was an Amazing blog. It was useful and informative. Learnt about the financial advances from this blog.

  18. This blog is so informative and its useful thing .fin tech firms are preventing and deducting the fraudulence in financial side.

  19. Aditi Khandelwal

    FinTech is undoubtably working a lot in preventing fraud
    Life becomes so easy when things like this come up and make life easier .

Leave a Comment

Your email address will not be published. Required fields are marked *

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116 thoughts on “4 Ways FinTech Firms are Preventing and Detecting Financial Frauds”

  1. H.Arvind kumar

    4 Ways FinTech Firms are Preventing and Detecting Financial Frauds this article was very useful for me.

  2. Financial Frauds are very common nowadays. Everyone should be aware of how to prevent them. This blog is very informative.

  3. Ahmed Ali Akbar Blue

    In the current world we see that there is tremendous growth in digital currency as well as finance, this has also given opportunity for more unethical practises and thefts to take place. Some one had to stand against these pactises and I am happy to see that Fintech companies are taking various measures and are coming up with various practises to outwit these thefts !!!

  4. Pingback: 4 Ways FinTech Firms are Preventing and Detecting Financial Frauds – Site Title

  5. Very Informative Blog!
    The 4 Steps gives us the deep understanding of how these firms are preventing and detecting the financial frauds.

  6. It good to know that there has been detected the way of finding frauds , as there were many scams.
    Fintech firms are preventing advanced transaction monetoring and instant notification, biomaterics, automated bank statement,digital foot screeing. It seems good that know ther are very less chances of fraud

  7. Miles Education up-skills students and professionals to help them be future-ready and enable their career progression. With Miles you can earn your CMA, establish global credibility and avail assured placements at one of the Big 4 or MNC’s in India.

  8. Christeena M S

    Miles education is a good academy which provides quality education to all the needed students. And gives all the updates about the courses. Also gives motivation to do the course.

  9. Aleena mol reji

    As we know today the financial frauds are increasing,in this situation fintech firms are giving a good ways to prevent it,it was very useful and appreciatable.

  10. I’m glad I read this blog because I feel I’ve gained some knowledge about fraudulent acts in financial sector and how to prevent them

  11. Abishek Adithya R

    The firm categories of Miles Education expect their headcount to increase in response to AI over the next two years which is been very useful for the generation and for the society and for the upcoming students to increase their skills and we can seek jobs through this miles Education.The FinTech sector has seen unprecedented growth over the last few years in India and across the world. Laden with opportunities, this trend has grabbed the attention of stakeholders as well as that of fraudsters who keep unearthing innovative and cunning ways to break into the system and make a quick buck.

  12. im glad that i came to know about the fraudulant acts and this was very much helpfull to prevent those frauds

  13. The techniques used to reduce and prevent frauds are really amazing. KYC is the best option to choose when it comes to detection of frauds.

  14. SIYA MARIA JAMES

    This blog help lot to understand about the advance solution of RBI. For me this blog was very informative.

  15. Twinkle Johnson

    I come to know about key areas where in FinTech companies are gearing up to detect and prevent fraudulent . This was very informative

  16. This blog is informative. Which includes all the methods for detecting financial frauds.I think I can learn more from this.

  17. This was an Amazing blog. It was useful and informative. Learnt about the financial advances from this blog.

  18. This blog is so informative and its useful thing .fin tech firms are preventing and deducting the fraudulence in financial side.

  19. Aditi Khandelwal

    FinTech is undoubtably working a lot in preventing fraud
    Life becomes so easy when things like this come up and make life easier .

Leave a Comment

Your email address will not be published. Required fields are marked *

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