7 Ways to Protect Your Financial Data from Fintech Frauds

May 23, 2022 Mutual Fund

In today’s digital world, considering the convenience, speed, and ease of access, online banking, remote bill payment, UPIs, and even mobile wallet applications are gaining increasing popularity. This has majorly paved the path for consumer’s financial data to enter the digital space.

The use of mobile payment systems and digital wallets has increased dramatically worldwide, especially during the pandemic. However, with any digital transaction, cybersecurity is always a concern, digital wallets and online payments like UPI continue to be vulnerable when customers are unaware of fraudulent tactics.

Financial institutions are constantly attempting to prevent consumer information from being compromised or lost. In the end, though, a consumer’s data is only as secure as the precautions they take themselves. We are all aware of the importance of safeguarding our personal information when using the internet. When it comes to your finances, it’s even more important to take precautions to safeguard your financial data.

There are several ways our financial information can be compromised online, from cybercrime and identity theft to phishing scams and banking frauds. As a result, it is critical to be extra cautious with your financial data.

Fintech Fraud affects everyone, not just consumers. Businesses are more vulnerable to email and online fraud, as seen by recent data breaches at big retailers and an increase in fraudulent emails. Companies with dedicated IT departments work hard to protect their sensitive data and have probably taken all the necessary precautions. Given that, many consumer-oriented online safety precautions can also safeguard businesses.

You may think that you do not contain any highly valuable financial information. So, you won’t get trapped by cybercriminals?

In fact, fraudsters seek identities similar to yours to evade suspicion of their crimes. A fraudster could use details about your identification (last name, first name, address, passport number, bank information) to apply for mortgage loans or credit cards in your name. A false passport or driver’s licence could likewise be made using your identity.

Here are 7 ways you can protect your financial data from Fintech Frauds:

1. Use a secure internet connection

When shopping or banking online, make sure you are using a secure website. A secure website uses encryption to protect your information as it’s being transmitted. Public Wi-Fi networks, like those you find in coffee shops or airports, are often not secure, and this means that people on the same network can intercept the data you’re sending and receiving.

Signing your phone to an unsecured public Wi-Fi connection, you provide easy accessibility of your financial data to fraudsters on the prowl. While making an online payment or entering any sensitive financial data, ensure to use a secure private connection.

If a website is secure the URL starts with “https” and there is a padlock icon next to the URL. To help protect your information, avoid entering personal or financial information when you’re using public Wi-Fi. This makes purchasing things from e-commerce sites and online retailers, which are potentially risky as these networks require your payment details.

2. Keep your devices safe

Always keep your devices, such as mobile, laptops, tablets, etc., safe from viruses. First, make sure to install and update your antivirus software and ensure your firewall is turned on. You must be careful about what you download and clear your device cache and browsing history. Device fingerprinting has increased the importance of your devices like mobiles and laptops. A device can be hacked offline or online. Offline hacking can happen if you leave the device in someone else’s hands, like leaving your mobile in not so reputed repair shop.

Online hacking can happen from direct attacks; most occur when you download apps, pirated movies, or similar stuff from unsecured platforms. Also, the devices can be hacked via viruses or malware; hackers can access your sensitive financial data from your mobile and laptops. In order to avoid any virus or malware entering your devices, keep your laptop and mobile security software, web browser, and operating system updated.

3. Minimise your digital footprint

To keep online financial information secure, users must first and foremost reduce their digital footprint. You should limit the exposure of your personal and financial information to a minimum on the internet.

As mobile payment options became available, several payment apps emerged. A debit or credit card must be entered into the mobile wallet for these applications to work. During the application process, details like the card number, VCC number, expiration date of the card, etc., are entered by you, which is highly risky if the network is not secure. You should enter one-time credit card numbers and activate two-factor authentication for all online transactions and accounts whenever possible.

Since banking is now at your fingertips thanks to your smartphone, protecting your SIM is important. Your SIM can be cloned in hardly 20 to 30 minutes, and if you suddenly lose network, that is a warning sign. If you leave your SIM cards unattended, fraudsters with SIM readers/writers can clone them, use them on some other phone, and receive the OTPs and other SMSs sent to you by banks.

Thus, several banks today use device fingerprinting, and it will ask for additional information if both the SIM and device don’t match.

4. Do not bite that bait

Never share your sensitive financial data with an impersonator; they may call you and send messages or emails asking for your banking details. Bank authorities never ask for any such information and do not share any detail to confirm their identity.

A sure-fire way to lose your money is by sharing one-time passwords (OTP) with unknown entities or scanning unverified quick response (QR) codes. A fraudster may send a collection request and ask you to approve it to receive money. You will lose money if you give digital consent to these kinds of transactions. Keep changing your passwords periodically.

Another way to help and protect your financial data is to use unique, strong passwords. A strong password has at least eight characters long and includes a mix of upper- and lower-case letters, numbers, and symbols. Avoid using easily guessed words like your name or birthday. You should also avoid using the same password for multiple accounts. Also, Multifactor authentication, using more than one password to access an account, is a critical step in protecting your online financial data.

Before clicking on a link, you check the source and ‘mouse over’ the link to see whether you are being taken to the genuine site or not. Fraudsters may send you a mail that is masked to show the sender as a genuine entity; in other words, they resort to phishing. These emails or messages often include links or attachments that, if clicked, can install malware on your computer or redirect you to a fake website that looks real but is designed to steal your information. To protect yourself, don’t click on any links or attachments in email messages unless you’re sure that they are from a trusted source.

5. Use smart and verified apps only

Living in this digital age with access to everything from food to finance at your fingertips is possible due to the fintech apps. There are several banking apps and mobile wallet apps that help you transact easily within minutes. Do note that these apps store your sensitive financial data, and it could be at risk if you are unaware of the application details. Mobile apps are great for quick access; however, not all apps are secure.

How many of us take the trouble of checking the privacy policies of apps that we download? As a rule, don’t give permission to all your data like photos, location, email, SMS, microphone, camera, etc. This can be a serious threat because banks send emails and SMSs for every transaction, and any app that reads all that will know your exact banking transaction details.

Thus, be mindful of the app you download on your phone and ensure that they are genuine and verified.

6. Protect your cards from ATM skimming

ATM skimming is done by placing a tiny device to steal data from the card when it is swiped. The fraudsters use the details for cloning your card or making online transactions. This includes stealing the electronic data of a card, and the customer will not realise it until the money is withdrawn from their accounts unknowingly.

In order to prevent falling prey to this, you have to check the ATM very carefully for any skimmers or if it has been tampered with. Check if the card reader on the ATM looks unusual or damaged. Cover the machine keypad while entering your PIN, and avoid using ATMs in deserted regions.

7. Beware of loan frauds

Taking a loan nowadays has become easy due to the increase in digitisation and the rise in instant loan apps amidst the pandemic. Applying for the loan, processing it, and disbursing it may all be done online and at your convenience. While this is convenient, it has resulted in loan fraud.

According to a working study by the Reserve Bank of India, over 1,100 digital lending apps are available on Indian app stores, with over 600 of them being found illegal. According to media reports, consumers are increasingly concerned about new loan accounts appearing on their credit records, even though they have never borrowed money.

Several scammers are using the PAN numbers of many individuals to obtain loans from third parties. Debit and credit card fraud cases have also increased. This occurs when an unauthorised person purchases using your credit or debit card. Loan and credit card fraud can have a negative impact on your credit score.

If you need a loan and are applying online, make sure to evaluate the digital lender’s credibility. A consumer should make sure that the lender has been authorised by the Reserve Bank of India and must have reliable lending history. Any authorised lender will have eligibility criteria and terms and conditions related to the loan; do not be fooled by digital lenders when they promise loans with no documentation or credit check; they will simply store your financial data.

However, if your financial data is misused or you become a victim of Fintech Fraud, make sure to file a complaint with cybercrime and the financial institution or bank concerned.

Although advancements in technology with fintech platforms have made it convenient to transact online and save precious time, energy, and costs, enough care and prudence must be adopted to secure your financial data. In response to the increasing number of online fraud cases, the government has taken measures to improve cybersecurity.

In order to prevent any fraud or misuse of your personal and financially sensitive information, it is vital that you take the responsibility to safeguard your sensitive personal and financial data by following the points mentioned above and being financially aware.

Financial awareness helps you safeguard your and your family’s financial health by adopting effective ways to safeguard sensitive financial information. Financial literacy helps you become financially conscious and aware of the aspects of safeguarding the financial information.

his article first appeared on PersonalFN here