What’s inside?
Make data orchestration a critical piece of your fintech’s risk program. This guide will show how to:
- Effectively leverage data to free up engineering resources.
- Utilize all data and third-party signals to prevent fraud in real time.
- Reduce customer friction without increasing fraud.
- Implement end-to-end control of fraud and compliance.
Fraud and Compliance Challenges in Fintech
In the rapidly evolving fintech landscape, organizations are grappling with three significant challenges: escalating fraud, managing customer growth and experience, and complying with regulations.
A comprehensive PYMNTS survey of 200 fintech executives across the United States revealed the substantial financial impact of these challenges. The average U.S. fintech was reportedly losing $51 million annually to fraudulent activity, with some losses far exceeding that figure.
The effects of increased fraud are not only financial. They can also result in fines, regulatory scrutiny, and consent orders that inadvertently stall or limit growth.
According to the American Bankers Association, 93% of fintechs struggle to meet compliance demands. More than half of fintech firms had incurred compliance-related fines exceeding $250,000 in the previous year, primarily because of deficiencies in transaction monitoring, customer due diligence, and suspicious activity reporting.
Fintechs should heed cautionary examples from the banking sector. In early 2024, the Office of the Comptroller of the Currency assessed a $65 million penalty against City National Bank of Los Angeles, citing systemic risk-management failures. The bank also received a cease-and-desist order requiring comprehensive governance reforms.
This case and others serve as a warning that fintechs must prioritize robust risk-management and compliance frameworks to avoid similar outcomes.
Addressing the Engineering Resource Conundrum
Why Download This Paper?
Fintechs have to take on fraudsters through a multi-front approach, but it can be complicated to manage each front at the same time if you don’t have the proper tools. You need to detect and prevent escalating fraud, manage customer growth and experience, and comply with rapidly changing regulations.
The numbers show there’s work to be done. The average U.S. fintech loses a staggering $51 million annually to fraud. An alarming 93% grapple with compliance challenges that too often result in hefty fines.
By downloading this resource, you’ll take the first step toward unlocking the most crucial piece of your modern fraud and risk platform—data orchestration. Learn how to leverage it to consolidate all your data signals, make the best use of your data to free up engineering resources and unveil fraud, and improve customer experience all while staying compliant with evolving regulations.
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