Emergence of biometric technology will aid in identifying and neutralizing financial frauds intelligently
A plethora of fintech players in the country is transitioning towards the use of alternative data points to help the vast population of underserved and underbanked masses gains access to credit. Present-day lenders no longer prescribe to traditional credit reports and demand a greater knowledge about the various spending and repayment patterns of prospective customers. Also, conventional credit reports fail to provide ample financial cover as the majority of the Indian populace is unable to receive loans through formal pathways as only a tiny percentage of the masses bear credit cards. Moreover, the traditional modes of credit assessment are incapable of addressing the credit requirements of a population that is characterized by thin credit files.
Therefore, several fintech entities are optimising alternate data sources to evaluate prospective borrowers. Such alternative data points not only lend more credibility by enhancing traditional credit reports but also add novel paradigms in the credit report such as lifestyle, interests, spending habits.
Managing one’s finances can be a relatively complex ordeal. Most people often shy away from fathoming the various layers of financial management. Fintech companies are changing that by including novel parameters like gamification in their particular apps to render the process more fun and entertaining. To that end, they are constantly devising novel methods of inserting gaming into banking operations. As nothing attracts users like gaming modules, fintech companies expect that such addition will persuade users to devote more time to their app. This also proves instrumental in creating aware and better-informed customers as they are likely to spend more time learning about various financial services and product suites. Moreover, the resultant digital footprints of users help banks know their customers better.
Whenever a substantial transaction such as a large withdrawal or a purchase is carried out from your account, banks and NBFCs usually call you or send you an SMS to corroborate the fact that you have commenced the transaction. In the future, the emergence of biometric technology will aid in identifying and neutralizing financial frauds intelligently and seamlessly. It also helps lending firms take into consideration the various seminal financial aspects like transaction location, synchrony with spending traits, and the device utilized for enabling the transaction, to gauge the actual scope of banking frauds.