Fraud prevention should be top priority for fintech investors

Why read this story?

Editor's note: A combination of regulatory scrutiny and the ongoing funding slump is pushing fintech founders to prioritize risk management and compliance. While some founders are now becoming less tolerant of frauds, not everyone is willing to change their ways.  Globally, fintech deals slowed to $52.5 billion in the January-June period, as against $55 billion in the first half of last year. While the overall fintech funding dropped 14% across the world in the first half of this year, it dipped around 3% for Indian startups, says a report by funding tracker Dealroom.co. Yet, fintech firms in Southeast Asia, Africa and Europe have been able to raise more capital this year compared with those in India and the US, the report adds.  The immediate implication of the drop in funding is that venture capitalists are more picky about fintechs they want to invest in. While there is an obvious correlation between dry powder and the need for fresh funds by founders, some venture capitalists are asking tough questions about Indian fintech firms. Discussions about know-your-customer processes, data management and fraud mitigation have …