How sophisticated fintech upgrades can lead to financial and trade fraud

by James · October 6, 2022

For the most part, fintech innovations improve the efficiency, usability and security of the financial sector.

However, it would not be true to say that new technologies create a perfect world, and – as always – there are those with bad intentions who can exploit fintech developments for their own malicious gain.

Data breaches, identity theft and fraud continue, and while fintech has closed the door on some of the potential opportunities for hackers to explore, new loopholes are constantly emerging.

So how do you minimize the risk of being scammed? In this article, we’ll take a look at techniques you can use to ensure your payment apps are hack-proof and methods to detect currency fraud in your trading activity.

In 2021, online fraud attempts increased by a staggering 25%. Don’t add to the stats – follow these simple rules instead.

Table of Contents

Locks down

You may be sick of the word “lockdown” given the events of the last couple of years, but this is what you need to do with your computers and mobile devices when sending payments online.

Whether it’s a banking app or a trading platform, there are ways you can secure your device against fraud and scams. Like roots breaking through pavement, hackers need a crack to squeeze into – usually that will be learning your account login details.

Two-factor authentication is the easiest way to fight a hack. This requires the user, i.e. you, to log in with a username and password, but adds an extra layer of security – often a password sent to you via text message or email. Without this code, you simply cannot log in, which stops many forms of online fraud in their tracks from the start.

Although generally less of a problem, hackers can also penetrate Bluetooth connections to steal data. You should consider turning off Bluetooth when not in use and only use this method to transfer payments as a last resort.

Update your apps

It’s always tempting to ignore the latest downloadable updates to your app, isn’t it?

The problem with that is that occasionally the updates are to fix weaknesses in an app that could otherwise be exploited by fraudsters.

Bugs in apps can become public knowledge, and hackers are ruthless in diving into these vulnerabilities. Updating your apps can help ensure you don’t become their latest victim.

A similar mindset exists with the operating system of the smartphone or tablet. Again, the temptation is to turn a blind eye to all available OS updates. Nevertheless, these can also combat known threats that could otherwise potentially see the device’s security compromised.

Every penny counts

Hacks involving online shopping tend to be all or nothing – which is why vigilance is important, especially in securing your login information. There have been cases of data breaches at trade brokers in recent times.

But our personal bank accounts can be hacked without our knowledge and it can be days, weeks and even months before we discover the problem.

Some scammers are clever and only make small payments from your compromised account – hoping to avoid detection by assuming you won’t check your bank statements with absolute care.

So always check every single transaction that goes through your bank account via any payment method – you just might spot a pattern that reveals a hacker who has already slipped past your defenses.