Fraud Risk Management and How to Enhance Compliance with Real-Time Monitoring

The scale of the financial landscape is growing and transforming over the last few years. With the introduction of fintech

fraud risk management

The scale of the financial landscape is growing and transforming over the last few years. With the introduction of fintech apps and tools, the spotlight is on the revolutionization of the financial ecosystem. The dependence on financial apps and tools has been increasing day by day. 

The advancement of technical capabilities in the financial sector is also translating into the increase of threats and fraud risks in the internet landscape that affect financial apps and their users. Fraud risk detection and the mitigation of cyber threats are very necessary to protect real users from difficult situations and loss of money. 

Why is Fraud Risk Management Necessary in the Fintech Landscape? 

Fraud risk management is very important in the fintech landscape because there are a number of fintech solutions like mobile app payments, cashless payments and digital wallet maintenance that expose users to cyber threats and real-time frauds. The use of technology is also done for SMS fraud, Email fraud etc. 

While a lot of useful fintech tools are used for the benefit of people, there are also a lot of fraudulent websites and portals that are scamming people. The impact of the fraudulent activity is put directly on people and companies that exist in real life. To protect the real-life assets and wealth of people, companies have to stress the use of fraud risk management tools and techniques. In the next section, you will come to know about the components of fraud risk management and how real-life monitoring plays a huge role in it. 

Strong security measures

A fintech company can collaborate with developers and testers to ensure that all the right security provisions are in place. Adopting the current industry standards and implementing strong security measures can improve the structure and layout of the FinTech app, protecting it from fraud risks and security issues. Multiple security layers and the adoption of advanced security measures can ensure that the fintech app is protected from fraudulent activity. 

Monitoring of transactions

The real-time monitoring of transactions and the data related to high-volume transactions can also protect the users through data analytics and monitoring of the transaction process so that there are no security glitches and other issues arising from the whole funnel of transactions. A fintech app, like a highly trusted banking application, will be used by millions of people over a month. The use of real-time monitoring for transactional data can reduce the impact of errors and the possibility of fraud. 

Verification of user identities 

The use of fraud detection and risk management tools and strategies also pivots on the verification of user identities. The users who are using the fintech app should be registered and authorized to conduct certain actions on the application interface. Unauthorized access and infiltration of sensitive information should be protected against. Monitoring people, merchants and companies in their financial activity for security purposes and using the analyzed data to verify user identity and monitor user activity is a step towards fraud risk management

Integration of Fraud Risk Management Solutions 

Leading fintech companies are taking the challenge of fraud risk management very seriously, and they are using different strategies to create capabilities of fraud risk management in an application. The integration of fraud risk features into a fintech application should be seamless and fast. Fraud risks should be mitigated as soon they arise. 

The fintech company should send out a strong message in the business arena that it is serious about protecting its users from fraudulent activity. This improves the credibility and reputation of the fintech company and ensures that fraudsters stay away from these applications and portals. Creating secure tracking features and security assessment systems to be linked with the FinTech application and then marketing them as a strong USP should be an important step towards fraud risk management. 

The Security Management and Real-Time Monitoring Tools 

The security features and fraud management features should be easy to integrate and use with other fintech features. The transactions and other banking activity should be monitored properly with the use of real-time monitoring capabilities and processes. The real-time monitoring solutions should be integrated in an adaptive manner with different fintech applications and portals. 

The company should have the autonomy to integrate and use fraud risk management tools as it wants. However, the goal should always be focused on benefitting the people who are end users of fintech applications. The real-time monitoring features work in such a way that if it observes a stream of fraudulent transactions and actions from one IP address or device, it can take decisive and protective action against the same. 

AML sanction screening 

Along with fraud risk detection and mitigation, there should also be a feature to screen money laundering efforts. The anti-money laundering and sanction screening process should be a part of the fraud risk management strategies to be included in a FinTech application. The anti-money laundering tools and processes should be in line with the compliance and policy rules present in the fintech landscape. Along with an AML sanction screening process, there should be secured transactions and other screening processes that are linked with the fintech applications.


The use of these fraud risk management and other risk management features is what makes a strong and secure fintech application that can be used for different purposes across demographic segments. The use of these risk management strategies also has a positive impact on customer confidence and other parameters linked with the popularity of a FinTech app. 

A secured and strong fintech app should have a multifaceted data protection strategy around itself. Fintech leaders such as FidyPay are focusing on creating the right kind of risk management strategies and real-time monitoring strategies to ensure that the customer can get a good user experience from the fintech application.

There are many reasons why a fintech application development agency should focus on enhancing security provisions and data privacy arrangements around the fintech solutions it offers the customer base. Fraud risk management is just one aspect of this product offering. 

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