Now that we know why FinTech apps are proliferating and gaining unexpected popularity, as given in the first part of this blog, it is time to move a step ahead.
Unlike several other businesses, the FinTech market witnessed a spectacular boom amidst the pandemic.
In the shade of the pandemic where several industries experienced a setback, the concept of technology and innovation, which went hand-in-hand to simplify money matters, gained immense popularity and stardom.
Now that we have spoken about the advantages of FinTech apps, it is time to pay heed to the possible frauds in this genre.
As aptly coined by Chris Skinner, the global FinTech pundit, “Ignoring technological change in a financial system based upon technology is like a mouse starving to death because someone moved their cheese.”
So, it is inevitable to go with the flow and embrace technology for a better today and tomorrow.
On the contrary, there are a few things one needs to be extremely vigilant about while indulging in any technology.
Talking about FinTech, we agree that there are a bunch of FinTech apps that make life easy and come with security, transparency, and are true to confidentiality. But there also exists a phenomenon called fraudulent FinTech apps. Let’s learn more about them.
Fraud and FinTech apps
Nowadays, everybody is interested in financial technology. Whether it is an entrepreneur, businessman, consumer, or homemaker, everybody wants to manage finances at their fingertips.
This is the primary reason for the proliferation of FinTech apps and their ability to add so much more ease to our lives. Payment gateways available on eCommerce websites help us order almost everything we need. Payment applications such as Google Pay, Paytm simplify peer-to-peer transfers, bill payments, and a range of other transactions.
While we use all this at our comfort, did we think that fraud is possible even here?
I am sure when many people think about fraud; they decide to discard these apps and never use them again. But wait for a second, is that what needs to be done?
As a user, one needs to be vigilant and do good research before downloading and using these or any applications. It is also important to read every message that pops up while completing the installation. Read carefully what permissions these apps are asking for.
On a more concrete level, it is a huge responsibility on FinTech’s shoulders to develop a foolproof app to minimize every opportunity of fraud.
Here is what FinTechs should do,
A regular password isn’t enough to offer complete protection to funds. Therefore a two-step authentication that instantly generates a second password to be sent to the users the email is highly recommended. In the era where AI is becoming so popular other options such as fingerprint or biometric identifiers or facial recognition can build another wall of defenses.
It is “The process of converting information or data into a code, especially to prevent unauthorized access.”
There are several points in the transmission where information related to financial data can be encrypted. Robust encryption software hides this data at multiple locations and performs ongoing audits to identify potential vulnerable and weak spots.
These notifications are inevitable, irreplaceable, unavoidable, inescapable (well, I can’t think of enough words to highlight the importance of real-time notifications), but I am sure you got my point.
Most banks link their customer’s email ids and phone numbers to their bank accounts and notify them every single time a transaction is made.
These notifications work as a complete savior and can help users know about unnatural or fraudulent activity done with their account.
These notifications actually work like “a stitch in time saves nine.”
FinTech will continue to make finance easy and more accessible. Based on consumer demand, skilled and talented techies will keep developing feature-rich apps that get better every day.
FinTech organizations do their bit very seriously to make these apps secure and flexible.
However, following the fundamental of “your safety is your responsibility,” it is time for users to stay updated and make wiser and more informed choices.
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