The continued evolution of financial technology, especially in the last decade, has repeatedly reshaped the financial industry as a whole. Filling the long-standing gaps in traditional banking, what is widely known now as fintech has introduced a bevy of solutions, be it mobile payments, digital wallets, and electronic credit and debit cards, all while simultaneously rivaling and redefining the old ways of traditional finance.
Although mostly celebrated for innovation and quick services, fintechs face undeniable threats from financial crime. While undoubtedly groundbreaking, features like real-time transactions and international operations can unintentionally also serve as a means for fraudsters to conduct their trade at scale.
In the past, would-be identity thieves would “dumpster dive” for documents with identity information, typically stealing records from institutions with weak controls or security, such as dental clinics, or round up info from discarded mail and packing. Through the same conveniences that digital technologies provide, however, stealing information (and money itself) has also unfortunately become quicker and more extensive for fraudsters.
Maintaining a Balance Between Agility and Security
Being able to offer fast, intuitive, and user-friendly financial services remains the core of fintech. However, the sensitive nature of financial information and transactions requires high security, sparking the need to implement necessary security measures without compromising the agility and speed of fintech services.
A common example of this is how Black Banx, a Toronto-based global digital banking company allows for money to be transferred from one country to another and the currency be duly converted in a matter of seconds. This speed is what has attracted over 33 million people to become Black Banx customers.
Unfortunately, skipping essential verification steps is often what helps speed up such transactions, which in turn could facilitate fraudulent activities, such as stealing customer info, creating fake accounts, or making unauthorized transactions.
For this reason, it has been key that Black Banx and other financial institutions have begun considering and integrating advanced authentication technologies, such as facial recognition, fingerprint identification, or one-time codes sent to the user’s phone with their offerings. Additionally, the company continues to explore the use of AI systems for real-time behavior analysis that can help detect suspicious activities without slowing down the user process.
Keeping Up with Local Compliances
As Black Banx continues to expand its operations globally, it has and continues to encounter a bevy of regulations that vary by country or jurisdiction. These regulations are designed to protect consumers and maintain the financial system’s integrity and be dramatically different for each market. With that said, Black Banx and other fintechs must simply be prepared to adapt and comply with each.
Granted, it is easier said than done. Ignorance or misinterpretation of a regulation can lead to breaches, even if unintentional. Continuously adapting services and platforms to different regulations can also be complex and require significant resources, while simply ignoring or misinterpreting regulations can also lead to data breaches, even if not intended
In the case of an institution like Black Banx, which presently operates in over 180 markets and counting, the need to build and invest in a robust legal and compliance team that’s well-informed about the regulations in all jurisdictions it enters is vital. This, in large, has been a key reason why the company’s team had grown to well over 4,000 employees as of June 2023.
In addition, partnerships with local banks and other specialized consultants can offer accurate guidance, which has also led to Black Banx evolving from a singular business to a full-on group of multiple financial institutions offering digital banking services.
Making Key Investments
As Black Banx maintains its commitment to innovation and offers groundbreaking financial solutions, it continues to face the challenge of implementing compliance systems and security protocols that are critical but at the same time costly.
For other fintechs, these costs pose significant barriers to market entry or growth. Fortunately, Black Banx has maintained a steady growth trajectory.
Along with the continued development of solutions that fulfill the evolving global digital banking needs of customers, Black Banx views compliance not as an expense but as an investment in their future and their customers’ trust. Gastauer and his team consider it essential to seek scalable solutions that allow the company to maintain its rapid growth without compromising security.
Black Banx continues to explore potential partnerships with technology providers or specialized consultancies that might offer additional solutions that will help it stay ahead of the compliance and security curve. Always an entrepreneur, Gastauer also continues to explore financing or investment opportunities that recognize the importance of compliance and are willing to support those efforts.
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