As fintech companies continue to provide not just alternative banking solutions to millions of Nigeria, but also begin to dominate the financial landscape; questions about their safety and reliability have become commonplace.

Of course, the average Nigerian wants assurances that his hard-earned money will not suddenly disappear into thin air. While kudos must be given to many of these fintech companies in respect of how far they have gone to make their systems secure for seamless and safe financial transactions; still, fraudsters continue to find loopholes and ways around them.

While some of these loopholes are not directly the faults of these companies, still, there is more to be done to guarantee the deposits and transactions of customers on their platforms. This article takes a look at the dangers Social Engineering Fraud.

Social Engineering Fraud is a type of cybercrime where attackers manipulate individuals into divulging confidential information or performing actions that compromise security, often leading to financial loss. Unlike hacking, which relies on technical exploits, social engineering fraud targets human psychology, exploiting trust, fear, urgency, or curiosity to deceive victims.

Common Tactics Used in Social Engineering Fraud:
- Phishing: Fake emails or websites that mimic legitimate entities to steal sensitive information like passwords or bank details.
- Vishing (Voice Phishing): Phone calls impersonating banks, government officials, or company representatives to extract confidential data.
- Smishing: Fraudulent text messages urging recipients to click malicious links or share information.
- Pretexting: Building a convincing story to gain trust and access to sensitive information.
- Business Email Compromise (BEC): Scammers impersonate executives or vendors to trick employees into transferring money or sharing sensitive data.

Examples in Fintech:
- Impersonating Financial Platforms: Fraudsters may mimic fintech apps or websites to gain access to user credentials or payment information.
- Fake Customer Support: Scammers pose as representatives of fintech services, convincing users to share OTPs or reset passwords.
- Investment Scams: Fraudulent schemes promising high returns to lure victims into transferring funds.

Prevention Measures:
1. User Education: Train users to identify phishing attempts and suspicious behavior.
2. Two-Factor Authentication (2FA): Adds an extra layer of security to user accounts.
3. Verification Processes: Always confirm requests for sensitive actions through official channels.
4. Monitoring and Alerts: Use real-time monitoring systems to detect unusual transactions or access attempts.
5. Employee Awareness: For businesses, train staff to recognize BEC and pretexting schemes.

In fintech, where trust and security are paramount, combating social engineering fraud requires a combination of advanced technology and user vigilance.