FinTechs | Why a review of your fraud systems & controls should be a high priority

Our recent webinar analysed the FCA’s 2020 plan for FinTechs.  Resilience to fraud is a focus area of this year’s business plan and 66% of our audience said that improving fraud resilience was a priority. 

So why are the FCA focused on fraud?

The FCA’s fourth priority in this year’s business plan is “making payments safe and accessible.”   Our speaker, Gerard Hurley interprets the FCA’s use of “safe” to mean a “reduced risk of fraud for your customers (when making payments).”

Traditional cash-based transactions, payments and transfers have been pushed online due to COVID-19.  Many of these transactions are carried out by people using online facilities for the first time creating ample opportunity for fraudsters.

In addition, Push Payment fraud has been high profile in the last few years and during these tough times, fraudsters are taking advantage of both consumers and financial firms in new and innovative ways. 

What should you be considering as part of your fraud response?

 Simply, start with a review.  Gerard thinks there are some straightforward places to begin your review;

  • Controls - “Are your fraud controls as good as they can be?” Are they fit for purpose in the current operating environment?    
  • IT Security - Do you have “the right level of security on your customer accounts to prevent them from being hacked”?
  • Customer Services - “Review the security levels in your customer service teams. How do you know you are actually receiving a call from a customer when you think you are?” 
  • Technology usage - Gerard said “there are lots of FinTechs reliant on eKYC and there are ways that fraudsters can get around it…so firms should think about going to the next level…asking for ID, Proof of address and getting selfies from the customer” to verify identity.  This is particularly pressing if you have had previous problems or are running a high risk business”. 

Finally, ensure you document the findings and all of your decisions.  Good documentation should take the sting out of any potential reaction and you should have a more productive discussion if you document your decisions.

How can FourthLine help?

We can connect you with exceptional permanent and interim talent to strengthen your response to fraud and financial crime.

Schedule a call with Dan today to talk about the ways in which FourthLine can help you meet the requirements of the FCA business plan.

Topics: Featured, Financial Crime, Talent Solutions

May 26, 2020
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Daniel Waltham
Written by Daniel Waltham

Responsible for leading client relationships and new business sales. Dan takes a lead role in customer engagement, identifying, creating and designing solutions to help our customers with risk and regulatory challenges. Ten years of experience working with financial services businesses across risk, compliance, data protection and regulatory change.