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A study revealed that more fintechs will focus on strengthening their cybersecurity in 2023.
OCR Labs Global conducted a research entitled Fighting Identity Fraud in an Economic Downturn. The study unveils that nine out of ten fintech companies are considering tapping cyber experts to create a robust cyber architecture against cyber attacks due to the rampant third-party fraud in 2022.
The research is under the spotlight of 50 global members of FINTRAIL’s FinTech FinCrime Exchange. It is a group of fintechs worldwide, and they suggest collaborating on best practices regarding financial crime risk.
Findings:
- 60% of the respondents consider the following as the common types of fraud:
- Social engineering scams
- Identity theft
- Account takeover
- 81% expect this fraud trend to rise further this year
- 86% emphasise the importance of having a protective cyber shield for fraud prevention and management headcount
- 42% are interested in using fraud prevention software
- 40% are into machine learning and artificial intelligence solutions
- 38% are curious about implementing Digital Identity Verification (IDV) software
According to Russ Cohn, general manager at OCR Labs Global, the significant adversity that the fintechs are facing is the delay in reviewing cases.
“Investing in technology that keeps our customers safe is always our top priority. Fintechs that have sound business models and execution will grow, despite hard economic downturns,” mentioned Cohn.
“Unfortunately, growth and success attract fraudsters. That is why we continue to hire and strengthen our trust and safety capabilities.”
Additionally, Shay Ohshinusi, Financial Crime Operations Unit Lead at Mettle, noted the importance of reaction time in fraud situations.
“We want to strike a really good balance between people versus tooling. The best solution isn’t always to only throw people at a problem it’s about looking at how we can gain efficiency using fraud prevention software,” said Oshinusi.
“With the Bank of England forecasting that the recession is likely to last until well into 2024, now is a good time for fintechs to think about future-proofing.”
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