Adam Moelis of Yotta Savings joined Sunil Madhu for the third episode of this podcast series, to discuss the increase in sophistication of fraud and what banks need to do to encourage new signups while keeping information safe.
It seems logical that larger financial services firms, holding a significant volume of customer assets, would be more vulnerable to fraud than would younger fintech startups, but this is not always the case.
Fraudsters know that startups don’t always have the technology and processes in place to stop them. Many startups underestimate the effects of fraud and oftentimes experience massive losses early on before they learn their lessons.
Additionally, fighting fraud is not companies’ core strength; it’s building great products and providing great services. As such, ensuring privacy and security, especially in the onboarding process, should be outsourced to a shared service whose core competency is keeping out bad actors. This is possible because that shared service has been learned from the collective experience of several customers.
While each firm might have its own rules and processes for judging the veracity of new accounts, customers, markets, and technologies are constantly changing and evolving. A shared service with built-in AI that not only keeps up with industry rules but also leans on the collective experience of several firms can provide the best defense in the onboarding process.