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From Threat to Shield: How Fintech Empowers Financial Institutions in Combating Fraud

Author

Listed:
  • Maslinawati Mohamad

    (Faculty of Accountancy, Universiti Teknologi MARA, Puncak Alam Campus, Selangor, Malaysia.)

  • Fatmawati Jusoh

    (Faculty of Accountancy, Universiti Teknologi MARA, Puncak Alam Campus, Selangor, Malaysia.)

  • Noor Faiza M. Ja'afar

    (Faculty of Accountancy, Universiti Teknologi MARA, Shah Alam Campus, Selangor, Malaysia, Money Laundering Research Group, Universiti Teknologi MARA, Alor Gajah Campus, Melaka, Malaysia.)

  • Rabiatul Alawiyah Zainal Abidin

    (Faculty of Business Management, Universiti Teknologi MARA, Segamat Branch Campus, Johor, Malaysia.)

Abstract

The financial industry has significantly changed with the vast development of Fintech technology. Financial fraud has also increased with these advances, putting the financial industry at risk globally. Through the principles of financial criminology, the study illustrates some fintech technologies that can also be used as fraud-fighting tools in the financial industry. Tools including blockchain, biometrics, artificial intelligence, and machine learning were explored based on their function in preventing and detecting financial fraud. The study has found that several benefits have been brought in by the fintech tools, which can be considered as fintech solutions that contribute towards preventing and detecting financial fraud, for example, real-time monitoring and analysis of financial transactions, improved accuracy in identifying suspicious activity, enhanced customer identity verification, secure data encryption, and robust authentication protocols. Furthermore, such fintech solutions do bring extra benefits to the sustainability of financial institutions, such as better collaboration and information sharing among financial institutions and regulatory authorities, fostering a more coordinated and proactive approach to fraud prevention. This study offers useful information for financial institutions, legislators, and regulators and advances our theoretical knowledge of the revolutionary potential of fintech in fraud prevention and detection. It highlights the importance of accepting fintech as a potent weapon in the continuous fight against financial fraud.

Suggested Citation

  • Maslinawati Mohamad & Fatmawati Jusoh & Noor Faiza M. Ja'afar & Rabiatul Alawiyah Zainal Abidin, 2024. "From Threat to Shield: How Fintech Empowers Financial Institutions in Combating Fraud," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(14), pages 346-354, December.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:14:p:346-354
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    References listed on IDEAS

    as
    1. Parminder Varma & Shivinder Nijjer & Kiran Sood & Simon Grima & Ramona Rupeika-Apoga, 2022. "Thematic Analysis of Financial Technology (Fintech) Influence on the Banking Industry," Risks, MDPI, vol. 10(10), pages 1-17, September.
    2. Dwivedi, Yogesh K. & Hughes, Laurie & Ismagilova, Elvira & Aarts, Gert & Coombs, Crispin & Crick, Tom & Duan, Yanqing & Dwivedi, Rohita & Edwards, John & Eirug, Aled & Galanos, Vassilis & Ilavarasan, , 2021. "Artificial Intelligence (AI): Multidisciplinary perspectives on emerging challenges, opportunities, and agenda for research, practice and policy," International Journal of Information Management, Elsevier, vol. 57(C).
    3. Paulina Roszkowska, 2020. "Fintech in financial reporting and audit for fraud prevention and safeguarding equity investments," Journal of Accounting & Organizational Change, Emerald Group Publishing Limited, vol. 17(2), pages 164-196, September.
    4. Shefali Saluja, 2022. "Identity theft fraud- major loophole for FinTech industry in India," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 31(1), pages 146-157, November.
    5. Nafis Alam, 2022. "FinTech Regulation—A Key to Financial Stability," Springer Books, in: Hung-Yi Chen & Pawee Jenweeranon & Nafis Alam (ed.), Global Perspectives in FinTech, chapter 0, pages 9-24, Springer.
    6. Muhammed Basid Amnas & Murugesan Selvam & Mariappan Raja & Sakthivel Santhoshkumar & Satyanarayana Parayitam, 2023. "Understanding the Determinants of FinTech Adoption: Integrating UTAUT2 with Trust Theoretic Model," JRFM, MDPI, vol. 16(12), pages 1-23, December.
    7. Pallavi Sood & Chetan Sharma & Shivinder Nijjer & Sumit Sakhuja, 2023. "Review the role of artificial intelligence in detecting and preventing financial fraud using natural language processing," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 14(6), pages 2120-2135, December.
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