Every year, fraud costs the average US fintech $51 million, with many companies losing significantly more. Even again, that number just touches the surface of the devastation that fraud may do in the operations of FinTech firms. The underlying ramifications of fraud extend well beyond the black and white of the balance sheet.
“The FinTech Fraud Ripple Effect,” a project by Ingo Money, describes the several ways that fraud may impact FinTechs’ bottom lines. We interviewed 200 FinTech leaders from throughout the country to acquire a better picture of the scale of the fraud problem and its potential impact on FinTechs’ broader operations and customer experience.
As more fraud occurs, FinTechs place additional strain on their account holders. FinTechs who worry about fraud expenditures imposes twice as many limitations on their account users as those that do not.
Most FinTechs indicate that their consumers have difficulty moving cash between accounts, while fraud-prone FinTechs are more likely to experience these snags. When there is a bad user experience, customers find it more difficult to deposit and pay with their funds, and 26% more FinTechs that suffer from fraud report this issue than those that do not.
To enhance the user experience, the typical FinTech aims to invest in quick products. Near the top of FinTechs’ wish lists for innovation are investments in instant cryptocurrency wallet deposits and in-store cardless cash withdrawal options, with 31% planning to invest in the former and 28% in the latter over the next three years.
These are just a few conclusions drawn from our most recent research. The full picture of fraud’s true cost is presented in “The FinTech Fraud Ripple Effect.”
