Which of the following is considered a Fin Tech risk or red flag?

Non face-to-face customer interactions and onboarding are considered a significant FinTech risk or red flag due to the potential for increased fraudulent activity and money laundering. In traditional banking, face-to-face interactions typically allow for better identity verification, helping institutions confirm the legitimacy of customers. When onboarding occurs without direct personal contact, it is easier for individuals to obscure their identities, making it difficult for financial institutions to perform thorough due diligence.

This risk is particularly heightened in an environment where identity theft and synthetic identities are prevalent. The absence of personal interaction can lead to inadequate risk assessment processes, where institutions might inadvertently facilitate the opening of accounts by individuals who are engaged in illicit activities. Therefore, customer onboarding processes that do not involve face-to-face interactions necessitate enhanced monitoring and verification measures to mitigate risks associated with fraudulent behaviors.

In contrast, long approval times for financial products can signal inefficiencies but do not inherently indicate risk. Simple business models are typically easier to understand and less prone to abuse. Similarly, in-office customer service is generally perceived as positive and helps strengthen the relationship between the financial institution and clients, adding layers of trust and verification in transactions.