'Scam-demic': Fraud biggest threat to banking, says industry insider

The future of finance will be more intelligent and embedded into people’s daily lives, but one of the biggest threats to the industry is scams, according to Arjun Vir Singh, Partner and Global Head of Fintech of Arthur D. Little who said that the world is living through a scam-demic. 

“Last year, we saw a trillion dollars of recognised cost to the consumers or businesses,” he said. “I think there will be more losses which were not reported. People are getting much smarter. We now even have state-sponsored scams and frauds.”

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He cited the example of Dubai-based cryptocurrency exchange Bybit, which was victim to what is believed to be the largest cryptocurrency heist in history and lost $1.5 billion in Ethereum tokens. The attack has been traced back to a state-sponsored hacker group allegedly run by the government of North Korea.

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“More and more scams are getting institutionalised,” he said. “So, if I was to be worried about one thing that would completely unravel the future of finance, it could be scams and frauds and we should address it.”

Arjun was giving the keynote speech on the first day of the fifth edition of the Banking Innovation and Technology Summit, organised by Khaleej Times. The three-day event, which began in Dubai on Tuesday, brings together CEOs, CIOs, regulators, fintech founders and innovation leaders to explore the future of banking. 

Future of banking

Looking ahead to the future of banking, Arjun said that the “silver economy” was still underserved. He said that one in six people will be over the age of 60 by 2030 and that banks and other financial services are lagging in catering to them. 

He added that the percentage of people who remained unbanked in the world were significant. “Over 24 percent of the global population remains unbanked,” he said. “The persistent exclusion limits access to savings, credit and digital payments.”

He also called for “Regulation 2.0” to ensure innovation in the financial sector. “For us to continue innovating, regulation will have to get to the forefront,” he said. “If it doesn't get into what I call code, it will bring us to a standstill. Regulators will become catalysts of innovation. You will see that they will play a greater and greater role in legitimising ideas. Embracing them early is a good idea and that's my advice to every bank or every network I work with.” 

• Dubai

Nasreen Abdulla

nasreen@khaleejtimes.com

Nasreen Abdulla is a Special Correspondent covering food, tech and human interest stories. When not challenged by deadlines, you’ll find her pulling off submissions on the jiu jitsu mats.