# FinTechs: How to increase loyalty through user experience and fraud prevention Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-09-07 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: Why Quantity Doesn’t Guarantee Quality: Lessons from the Meta Description: Learn from the Twitter vs. Elon Musk saga on the importance of prioritising quality over user numbers. Discover how banks and FinTechs can build genuine loyalty URL: https://financedigest.com/fintechs-how-to-increase-loyalty-through-user-experience-and-fraud-preventionhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-1202705835-1736815264989-compressed.jpg) _![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/106-1736815265065-compressed.jpg)_ _By **Iain Swaine,** Head of Cyber Strategy EMEA at BioCatch_ The Twitter vs. Elon Musk saga is a lesson to any business built on user numbers – quantity doesn’t guarantee quality. Today, [banks and FinTechs](https://www.financedigest.com/fintech-v-the-banks-uneasy-bedfellows-or-a-match-made-in-heaven.html "FinTech v the Banks: Uneasy Bedfellows or a Match Made in Heaven?") are aware that they must switch from a growth-focused strategy to one that caters to the requirements of its key demographics and fosters loyalty if they are to become profitable, robust, and able to weather the current economic storm. This was a key theme at this year’s Money 20/20 show. The convergence of customer experience, loyalty, [digital transformation and fraud](https://www.financedigest.com/fraud-in-a-mobile-digital-world.html "FRAUD IN A MOBILE DIGITAL WORLD") suggested a new paradigm for strategic success: slower growth and increased quality. For example, neobanks like Starling articulated its [strategic focus on attracting and retaining those in its key demographics to achieve profitability instead of chasing numbers](https://www.financedigest.com/inskin-media-makes-a-number-of-strategic-hires-as-it-furthers-its-mission-to-maximise-attention-and-impact-in-digital-campaigns.html "Inskin Media makes a number of strategic hires as it furthers its mission to maximise attention and impact in digital campaigns") of accounts. That’s a wise move since, according to [BankInfo Security](https://www.bankinfosecurity.com/whitepapers/state-digital-account-opening-transformation-survey-report-w-5943), 85% of new account opening applications are subject to fraud. The old days of valuations in terms of number of users are disappearing fast. It is clear that when [banks solely chase large numbers of account](https://www.financedigest.com/are-banks-ready-for-the-new-accountability-regime-in-2016.html "ARE BANKS READY FOR THE NEW ACCOUNTABILITY REGIME IN 2016?") openings, criminals are happy to oblige and systems may not be of the highest cybersecurity standard, meaning they open fake accounts to support their criminal enterprises. Indeed, FinTechs see [three times more fraud than traditional banks](https://www.forbes.com/video/6309725913112/how-biocatch-uses-behavioral-biometrics-to-catch-fraud-with-ceo-gadi-mazor/?sh=2bf3d8062877) for exactly these reasons. For most growing companies soaring [account openings](https://www.financedigest.com/how-accountants-can-improve-financial-planning-and-results-through-open-banking-to-help-smes.html "How accountants can improve financial planning and results through Open Banking to help SMEs") are cause for celebration, illustrating strong user adoption and brand recognition. Criminals see [growing companies looking to quickly](https://www.financedigest.com/4-strategies-for-quickly-growing-your-startup.html "4 Strategies for Quickly Growing Your Startup") on-board new customers as a ripe opportunity. For example, one bank’s promotion for high-income prospects to obtain immediate approval for a deposit account and a [credit card](https://www.financedigest.com/uk-credit-card-borrowing-rises-by-most-since-2005-boe.html "UK credit card borrowing rises by most since 2005 – BoE") with a single application resulted in a subset of criminal applications. These were later tied to [down-the-line credit fraud losses and exploitation of mule accounts](https://www.biocatch.com/resources/white-paper/innovate-customer-experience). Similarly, while digital and [automated account](https://www.financedigest.com/5-common-mistakes-around-accounts-payable-automation.html "5 Common Mistakes Around Accounts Payable Automation") processes have helped banks provide faster services to customers, they are also susceptible to cybercriminals who can use stolen or synthetic identities to create new accounts. This can generate millions of [dollars in fraud losses](https://www.financedigest.com/dollar-retreats-headed-for-biggest-weekly-loss-since-mid-january-bitcoin-down.html "Dollar retreats, headed for biggest weekly loss since mid-January; bitcoin down") for individual institutions and erode trust. Undetected fraudulent account openings are a clear path to failure. Success and long-term viability are proved by [building genuine customer loyalty](https://www.financedigest.com/how-do-you-build-customer-loyalty-3-steps-to-follow.html "HOW DO YOU BUILD CUSTOMER LOYALTY? 3 STEPS TO FOLLOW") – which requires a holistic approach that incorporates the latest digital technologies, seamless customer experiences and more robust fraud detection and prevention. **How to cultivate lasting loyalty** Providing a flawless client experience (both online and offline) and guaranteeing the highest level of [fraud protection and prevention](https://www.financedigest.com/payroll-fraud-and-how-to-prevent-it.html "Payroll fraud and how to prevent it") are two essential components for banks in fostering customer loyalty. Battling [fraud to protect](https://www.financedigest.com/protect-your-organisation-from-fraud.html "Protect your organisation from fraud") customers is essential – but at the same time, customers want a fast and seamless digital experience they expect from consumer-style apps. This is the great [challenge for banks](https://www.financedigest.com/big-bank-ceos-to-sell-lawmakers-on-relief-diversity-efforts-amid-economic-regulatory-challenges.html "Big bank CEOs to sell lawmakers on relief, diversity efforts amid economic, regulatory challenges"), traditional and new. They need to ensure that [application and transfer processes are consumer-friendly while also ensuring stringent fraud](https://www.financedigest.com/using-email-intelligence-to-help-combat-insurance-application-fraud.html "Using Email Intelligence to Help Combat Insurance Application Fraud") checks. [Banks must continue to deliver a frictionless experience](https://www.financedigest.com/transforming-the-banking-experience-to-be-mobile-first-and-people-centric.html "Transforming the banking experience to be mobile-first and people-centric") to loyal customers while working hard to protect them as they engage with more and more services. Adding layers and layers of identity authentication can alienate [customers and lead](https://www.financedigest.com/customer-engagement-whos-leading-the-way.html "Customer engagement – who’s leading the way?") to genuine application abandonment, while increasingly complex criminal networks can still easily sidetrack many current fraud protection programs and processes. [Banks cannot keep up with how hackers are overcoming](https://www.financedigest.com/how-can-banks-overcome-the-tech-trust-gap.html "How can banks overcome the tech trust gap?") each new layer, from passwords to device IDs, one-time passcodes, and various authentication tools. From [social engineering](https://www.biocatch.com/social-engineering-scam-detection) to [credential stuffing](https://www.biocatch.com/blog/credential-stuffing-open-banking#:~:text=BioCatch%20started%20to%20observe%20instances,instead%20of%20testing%20at%20scale.), criminals are adept at using digital trickery to break down prevention barriers. However, they cannot fake the genuine behaviours of a valid customer. In the fight against fraud and toward safe, streamlined [customer experiences](https://www.financedigest.com/visionary-banks-fight-the-blur-hybrid-computing-architecture-brings-a-faster-sharper-customer-experience.html "Visionary banks fight “the blur”: Hybrid computing architecture brings a faster, sharper customer experience"), behavioural biometrics is taking a stand on the front line. **Reversing the course of criminal behaviour** Behavioural biometrics uses machine learning to analyse user behaviour to differentiate between legitimate users and criminals, preventing [fraud and identity theft while also enhancing consumer](https://www.financedigest.com/2021-predictions-less-fraud-shifting-consumer-behaviour-and-accelerating-pace-of-innovation.html "2021 predictions: less fraud, shifting consumer behaviour and accelerating pace of innovation") experiences. It does this by analysing real-time physical interactions such as keystrokes, mouse movements, swipes, and taps, profiling user activity on both the user and population levels to identify behavioural anomalies and patterns associated with genuine and fraudulent activity. Like poker players always have their ‘tell’, cybercriminals cannot mask the subtle behaviours that set them apart from genuine customers. For example, legitimate users tap into their long-term memory when continuously entering personal information, knowing their details well, while cybercriminals often pause to reference information or use copy and paste functions as they input unfamiliar information. Another example looks at age-related behaviour, how a senior citizen enters data is different from that of younger users, which can signal when a cybercriminal is trying to take over the account. Even if the profile seems to represent a known legitimate user’s physical traits and preferences, micro-behaviours can even give away the user’s emotional state. For example, cognitive analysis can uncover even the most advanced [social engineering](https://www.financedigest.com/31972social-engineering-in-the-financial-services-people-are-the-weakest-link-in-the-security-chain.html "Social engineering in the Financial Services : People Are The  Weakest Link in the Security Chain") scams by determining whether a user acts with purpose or exhibits signs of duress. Some of today’s most sophisticated attacks can be [detected only when fraud](https://www.financedigest.com/the-clues-to-detecting-fraud-are-hidden-in-relationships.html "THE CLUES TO DETECTING FRAUD ARE HIDDEN IN RELATIONSHIPS") protection solutions continuously monitor throughout a session for the most subtle deviations in user behaviour. In essence, [preventing fraud is essential to the success of today’s financial](https://www.financedigest.com/big-data-analytics-fraud-prevention-in-the-financial-sector.html "BIG DATA, ANALYTICS & FRAUD PREVENTION IN THE FINANCIAL SECTOR") services, from account opening to steadfast loyalty. Criminal behaviour patterns stand out in a huge group of genuine users; it requires cutting-edge technology to find them, but they are impossible to conceal. Adopting behavioural biometrics allows true [customers to experience seamless interactions and fraud protection](https://www.financedigest.com/id-fraud-is-on-the-rise-can-financial-services-do-more-to-protect-their-customers.html "ID fraud is on the rise: can financial services do more to protect their customers?") merely by being themselves. The financial sector has undergone a [digital transformation](https://www.financedigest.com/how-digital-is-transforming-finance-in-2023.html "How Digital Is Transforming Finance in 2023") today, and frictionless services and secure protection are essential. With the use of strong AI and machine learning, we can now leverage criminals’ actions against them and give devoted consumers an even better experience. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---