Resources Tighter Now: Fintechs Turn to Outsourcing Security Solutions

The Challenge of Building Robust Security Systems

In today’s fast-paced digital landscape, fintech companies are facing a daunting challenge - how to build robust and efficient security systems while keeping financial and manpower costs down. In Nigeria, the situation is particularly pressing, with customers submitting sensitive information online and banks relying on internal systems for verification.

The Limitations of In-House Security Solutions

According to Esigie Aguele of QoreID, building in-house security solutions can be capital-intensive and ineffective. “When banks and fintechs take on cyber fraud prevention on their own, it not only compromises their ability to deploy resources to their core functions but also puts their clients at risk,” he said.

The Benefits of Outsourcing Security Solutions

The alternative is to outsource security solutions to experts in the field. African fintechs can leverage built-for-purpose infrastructure and specialized skills offered by KYC companies to safeguard their systems against fraud. This approach not only reduces spending but also improves customer safety.

QoreID’s Fraud Prevention Solutions

QoreID, a digital identity and consumer data analytics company, has launched a range of fraud prevention solutions that utilize AI-powered authentication and advanced features such as facial recognition and liveness detection. The company’s facial recognition technology creates both 2D and 3D face maps to increase the accuracy of face matches, while its re-authentication solution deploys a de-duping layer to detect users creating duplicate account profiles.

The Advantages of Outsourcing Security Solutions

The benefits of outsourcing security solutions are clear. By partnering with experts in the field, fintechs can scale more efficiently and securely, without having to invest heavily in building their own security systems. Moreover, collaboration between industry peers is key to fighting fraud effectively.

• Improved customer safety
• Reduced spending
• Enhanced scalability and security

The Future of Security Solutions

“The Central Bank of Nigeria has made some progress regarding open banking and providing fraud mitigation resources, but until they move beyond guidelines to proper implementation, it’s better for existing fintechs and legacy bank operators to outsource aspects of security,” Aguele added.

Conclusion

In conclusion, the era of in-house security solutions is over. Fintechs must adapt to the new reality by outsourcing security solutions to experts in the field. This approach will not only save time and money but also provide a safer and more secure environment for customers.