Fintech Fiascos Remind Us to Keep Calm and Carry Cash
Apr 10, 2024
A cash transaction is instant, safe and unhackable. The relevance of these benefits in the modern payments landscape rises as cashless options are increasingly targeted by criminals, with ‘neobank’ Revolut recently revealing huge fraud losses and victims going uncompensated.
Writing for BNN Breaking, international correspondent Sakchi Khandelwal says there is an ‘urgent need for enhanced digital banking security measures’ following a ‘strong warning’ from Revolut in the wake of sophisticated account takeover scams that drained more than £200,000 from two business accounts.
This series of incidents underscores the increasingly sophisticated nature of financial fraud and the challenges that companies face in protecting their customers’ assets.
Khandelwal notes that ‘as financial institutions increasingly rely on digital platforms to conduct transactions, the potential for fraud and scams grows’ and believes the incidents should serve as a wake-up call for the digital banking sector.
The affected customers ‘have not been reimbursed for their losses, a decision that has sparked debate about the responsibilities of financial institutions to protect and compensate their clients in the event of fraud… The lack of compensation has left the affected businesses facing significant financial hardship.
Alongside the direct risks of funds being misdirected in digital transactions, personal data is also exposed in security breaches, which can lead to further fraud problems for victims as their information is shared between and exploited by criminal enterprises. Cash offers security and anonymity, with the exchange of value visible by both parties, no third party involved and no data exposed. For many transactions—especially where a vendor is not well known to the customer—cash provides the valuable option to keep financial information private, paying once only with no risk of further ‘unexpected payments’ down the line.
Revolut is also no stranger to downtime, proving unpopular with its customers in 2021 when its service went down on major shopping day Black Friday, following a series of outages that dogged their systems throughout November. At such times, customers can fall back on another joy of cash: its resilience, being usable offline, any time.