The last few years have seen fintech take the world by storm, streamlining and condensing traditional financial services to become faster and more convenient via technological mediums such as web portals and mobile apps. Technological payment methods have made banking services more accessible for the average consumer and facilitated more efficient interactions between companies.
But there is a dark side to the fintech revolution too, a recent report analyzing the state of fraud in fintech estimated that businesses and financial institutions have lost around $90 million to various cybercrime activities. The high-tech nature of financial services nowadays has opened new vulnerabilities in the system to thieves and fraudsters with the technical knowledge to exploit them. The more money flows into the fintech ecosystem, the more hackers are attracted to it, and the more everyone’s savings or businesses are exposed.
The report, published by Laminar Consulting, proposes custom software development as a solution to the risk of fraud in financial services. This is when a company hires its own development team, either in-house or outsourced, to develop unique software for its operations.
Custom software has many advantages, including greater flexibility and suitability to task, but the main factor here is its uniqueness. A ready-made, off-the-shelf software product is widely available and used by many companies. This makes off-the-shelf software solutions more attractive targets for hackers, who can access many businesses after finding just one vulnerability. A custom software solution is unique and can be kept a business secret, thus greatly reducing the risk of fraud. The company that commissions custom software can also choose which cybersecurity measures to include in the software. For example, a blockchain ledger could be integrated to enable peer-to-peer network validation and prevent falsifying. Further details on the use of custom software to reduce fraud are outlined in the full report.
To read the original news article, click here.
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