Fast, secure, and personalized mobile solutions are at the top of the list for Africa’s growing mobile communication user base. As a result, we’ve witnessed a rise in financial technology (fintech) companies dominating the industry. According to Findexable’s 2021 Global Fintech Rankings Report, 13 of the top 19 Middle East and African fintech hubs came from the African continent.
However, challenges in providing frictionless mobile services remain – and overcoming them has become increasingly difficult. And considering more than 80% of Africa’s population have signed up for mobile phone subscriptions, it’s imperative for fintechs to ensure they can effectively engage with this audience. Here we highlight common fintech challenges and opportunities organizations face today and how using the right digital-first technology can improve your customer experience.
What are fintech challenges?
Fintechs are well known for delivering fast, secure solutions to everyday banking activities. But with global events forcing the world to go mobile, consumers are looking for even faster, more secure alternatives.
African consumers have been at the forefront of this demand. African Business reports the continent is the second-largest banking market in the world today in terms of growth and profitability, partly because of the rapid adoption of new technology.
That said, African fintechs still struggle with:
- User acquisition: how do you make onboarding as fast and easy as possible?
- Customer experience: how do you ensure online banking is a streamlined activity instead of a frustrating one?
- Costs: if you upgrade your security, will you have more expenses?
- Fraud and account takeover: how do you prevent hackers from accessing accounts or devices?
Although revenue is not a key indicator of fintech success – speed and transaction volume are. And, with the barrier of being highly regulated, fintechs looking to get ahead must have proper authentication practices set in place if they plan to increase conversion rates and reduce operating expenses.
The most challenging part for most fintechs is implementing higher security without impacting the customer experience – a key advantage they have over traditional banks.
What are the opportunities in fintech?
The right digital-first technology could be the answer to most of these fintech challenges.
We have previously written how to provide customer-friendly authentication with silent mobile verification being the go-to solution. We also shared details about SIM swapping and how our Mobile Identity solution uses it for the greater good of protecting user information.
These fast, silent solutions can streamline most of the customer challenges we outlined above – while keeping costs relatively low and prioritizing fraud prevention. Here’s how:
Higher user acquisition
According to Forbes, Africa’s mobile money sector is booming. Registered mobile money accounts in Africa grew 12% to 562 million in 2020. The continent has 171 active mobile money services. Considering the significant rise in users, there is a major opportunity to embrace digital solutions that improve and reinforce the customer experience.
Using silent mobile verification can help you provide an uninterrupted onboarding experience for your customers. Rather than receiving an email or SMS with a 5-digit code, silent mobile verification authenticates your app users in less than 5 seconds – with no further action required.
That’s not to say that SMS isn’t a great failover option – since the worst-case scenario would be for your customer to not complete the transaction at all. But giving app users fewer steps in the onboarding process also means giving them less time to abandon it – increasing the likelihood that they’ll convert into loyal customers.
Improved customer experience
A key competitive advantage for fintechs over traditional banks is the customer experience. Fintechs entered the market with the value proposition of enabling customers to perform regular banking transactions in the palm of their hand, instead of visiting a branch or calling a contact center.
However, the more layers of security you add to your customer journey, the more you risk compromising on customer experience. Customers don’t want to leave your app to check an SMS for a confirmation code only to have to come back to your app and type it in. Silent mobile verification does this for them so all they need to do is open your app, sign in, and wait a few seconds (less than 5 to be exact) before they move on to complete their transaction.
Another way to improve your customer experience is to conduct a SIM swap check before sending sensitive messages to a customer. This will help you ensure the account-related information reaches the customer it’s intended for and eliminates potential fraud or identity theft activities.
Fraud and account takeover prevention
Regardless of the security solutions you have set in place, it seems hackers are always finding new ways to crack the code.
In South Africa alone, SIM-swap fraud nearly doubled in 2020, and digital banking fraud victims lost over R309 million (over $20 million) to criminals. It is also rife in other key fintech markets, like Nigeria and Kenya.
Using a combination of mobile security solutions such as silent mobile verification and SIM swap checks can decrease the chances of your authentication process being intercepted by a third party.
For one, silent mobile verification can keep customers’ information protected as the authentication process is completed entirely in the background – and isn’t visible to anyone that might be near your customer while they’re logging into their account.
SIM Swap checks, on the other hand, help verify transactions in cases when funds are transferred to a new account, the transaction amount is higher than usual, or if a new device has been detected. In this case, if it’s been detected that a SIM has been swapped, the transaction will be declined.
Key account information that you can check with the mobile network operator to prevent fraud and account takeover include:
- The date when the SIM card was activated
- If the phone number has been given to a new user
- If unconditional call forward is turned on or off
- If the phone has been reported as lost or stolen
- The last time the SIM card was changed
Security solution providers know that fraud prevention is a top priority for fintech organizations – which is why their solutions can seem to break the bank. However, since silent mobile verification and SIM swap checks use existing information and technology, there aren’t many added setup costs or ongoing expenses.
When a user signs into their account, silent mobile verification cross-checks their information with the mobile network operator (MNO). If the MNO confirms the information matches, the user is signed into their account. The entire process takes less than five seconds to complete and doesn’t require any other verification method such as usernames or passwords.
In the long run, setting up fast, silent user authentication minimizes fraud-related financial loss, customer acquisition costs, and manual security intervention costs.
Get started with Mobile Identity
Prioritizing fintech app security and user authentication is key in today’s digital environment. As cybercrimes surge, adding layers of security that don’t compromise on customer experience can become a competitive advantage.
Silent mobile verification and SIM swap checks are two solutions that can prevent common fraudulent activities. Built on the foundation of working with 300+ banks and financial institutions, and connected to more than 700 mobile network operators, Mobile Identity is made to help you overcome everyday fintech challenges and take advantage of new opportunities.
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