Hi, fintech fam 💜

Happy NY Tech Week! I’m finally soaking up sunshine in my hometown. You can catch me at a few events this week:

Wednesday morning: I’m joining a media panel with folks from CNBC and Bloomberg to share my insights on the future of fintech and media.

Wednesday afternoon: I’ll film some fun content for Season 2 of our show, Fintech Mavericks (powered by Brex!), in Union Square by the Brex founder's fuel-up truck. Come by, sip La Colombe, and say hey.

Thursday night: I’m co-hosting a private karaoke happy hour with the one and only Bhuva Shakti.

We’re gathering bold voices from climate fintech ahead of the Emerald Climate Fintech Summit this fall. Great drinks, real conversations, maybe a power ballad or two.

It’s small, curated, and filling fast. If you want to help produce an upcoming Summit with me, request your invite here.

Now, let’s get into today’s column.

INNOVATION

Inside the Fraud Economy: Why Fintech Can't Afford to Stay Naive

If you're a fintech founder or operator still treating fraud as an afterthought, here's a wake-up call: you're already behind.

Global losses from financial scams and fraud hit a staggering $485.6 billion in 2023. Identity theft was the most commonly reported issue, but that's just the tip of the iceberg. 

Synthetic identity fraud alone is projected to cost the U.S. $23 billion by 2030. According to Mitek's latest fraud-fighting Playbook, more than 15 billion leaked credentials are floating around on the dark web, waiting to be exploited.

"The speed at which fraud evolves now is unlike anything we’ve seen before," Kim Martin, VP Global Growth Marketing at Mitek and author of the Playbook, told me. 

"Fraud techniques spread across borders and industries in days, not months,” she said. “If one fintech sees a new attack vector, chances are others are already experiencing it too."

Martin underscores that fraud isn't siloed. It’s collaborative, adaptive, and increasingly layered.

And if the good actors aren't working together with the same urgency, we're all playing defense.

Old Tricks, New Tech

Fraud today is an unholy marriage of the old and the new.

Yes, we’re seeing deepfakes, injection attacks, and AI-generated phishing. But we’re also seeing a surge in low-tech scams like check fraud, which somehow still racks up nearly $21 billion in annual losses.

According to Martin, this hybridization is what makes modern fraud so dangerous.

"They’ll use traditional tactics like spoofing or stolen IDs, and then layer in generative AI or social engineering,” she said. “It’s not always the most advanced attack that works—it’s the most believable.”

That believability factor is key. I shared my own recent near-miss: a phishing scam that used spoofed SoFi branding so convincingly, I nearly handed over my login. The caller ID even displayed "SoFi."

As someone who’s covered fintech security for years, I should have known better—and still, I nearly fell for it.

"We’re all consumers, too," Martin said. "Whether you’re a founder, an exec, or just trying to help your parents set up their online banking, these attacks are getting personal, targeted, and hard to detect."

The Myth of Being Too Small to Target

One of the biggest myths in fintech? That small startups aren't juicy enough targets.

Martin is blunt: "If I were a fraudster, I wouldn't go after Chase. I'd go after a fast-growing fintech that hasn't hardened their security posture yet."

That makes early-stage companies a prime target for synthetic identity fraud, where fake personas built from real and fabricated data slowly gain legitimacy. These fake identities can open accounts, build credit, and even apply for loans—only to disappear with the cash when it's time to collect.

Layered Defenses Are No Longer Optional

So how do you keep up? Mitek's answer: layer your defenses. Think biometric verification, behavioral analytics, device intelligence, and yes, old-school fraud detection. No single tool is enough.

"Sometimes the AI sees what humans can’t. Other times, humans can spot what AI misses," Martin said. "You need both."

This isn’t just an operational issue. It’s a strategic one. Strong fraud prevention isn't a cost center—it's a growth enabler. Fintechs are selling trust, and if users don’t feel secure, they’ll walk. Worse, they’ll tell everyone why.

Security is Financial Wellness

As fintechs expand their role in financial education, security must be part of that conversation. Investing apps, neobanks, budgeting tools—they all teach consumers how to grow their money.

But what about protecting it?

"Part of financial wellness is not just about maximizing returns or tracking expenses," Martin said. "It’s about not losing everything to a scam you didn’t see coming."

Fintechs have an opportunity—and arguably a responsibility—to make fraud literacy part of the customer experience. Because the fraud economy isn't slowing down. And if we don’t evolve with it, we’re all just waiting to be the next case study.

Key Takeaways:

• Fraud isn't an edge case—it's a systemic threat, and it's evolving fast.

• The most dangerous scams combine old-school methods with new age tech.

• Startups are just as vulnerable as large banks, if not more so.

• Layered defenses and collaboration across the industry are critical.

• Fintechs should integrate fraud education into financial literacy efforts.

Bottom line: The fraud economy is booming. Fintechs can't afford to treat security like a feature. It has to be part of the foundation.

Mitek's latest playbook, available for download here, dives deeper into emerging fraud trends and defense strategies. 

_{WTF ELSE?}

• CFPB, bank lobby ask court to strike down open banking rule

• Chime’s IPO date nears: Stock target price set for fintech

• In this hi-tech world of finance, JPMorgan has an old school strategy to woo HNWs

• Fintech’s next chapter: profits rise, AI reshapes the landscape, and scaled winners come of age 

_{I WANT IT, I GOT IT}

• 🎧 Today’s Listen: Today's throwback episode of the Fintech Mavericks podcast is all about the power of instant money, featuring Orum's $82 million journey with CEO Stephany Kirkpatrick. Tune in to all her founder and operator wisdom here!

• 🚀 Today’s Activity: We celebrated Anton’s birthday over the weekend and enjoyed an intimate backyard hangout with just our family. I always love picking up our birthday cakes from Angela’s Bakery in Brooklyn. It's a woman-owned Dominican cake shop—so good, big, and gorgeous. 10/10 recommend getting your next cake here!

• 🧘‍♀️Today’s Self-Care: Lately, my nighttime routine has been out of sync—startup life gets hectic. But as a founder building something high-growth, I have to remind myself: taking care of me is part of the job. I watched this Vogue Beauty video with Salma Hayek sharing her self-care wisdom, and it honestly inspired me to reclaim that daily “me time”—even if it’s just 10 quiet minutes. It’s not always easy, but it’s always worth it.

_FINTUNES

🎵 Miley Cyrus - Easy Lover

This song is on repeat in my household. Are we even surprised?

_{LET’S CONNECT}

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That’s all for now! See you Thursday!

Love,

Nicole 💜