ASX digital lenders prioritise client safety amid shift away from cash

Organisations increasingly strive to stay ahead of scammers and safeguard identity and funds of customers
MME says protecting its customers’ data and fraud prevention are top priorities for the companyCrypto exchange
Crypto exchange Binance says it aims to maintain the highest levels of safety for users’ personal data and funds

Australia is swiftly transitioning into a cashless society, mirroring trends seen across the Western world. A report by the Reserve Bank of Australia (RBA) in 2022 revealed a drastic decline in cash usage, plummeting from 70% of consumer payments in 2007 to a mere 13%.

The Covid-19 pandemic accelerated the move towards a cashless society as online shopping became more popular and stores encouraged cashless transactions.

While there are advantages in the move away from using cash towards digital financial transactions including convenience, concerns about security loom. Criminals have shifted their tactics from physical theft to cybercrime, posing new threats to consumers’ funds and identities.

High-profile breaches, such as the one experienced by telco Optus in 2022, which affected millions of customers, prompted the government to establish a credential protection register to mitigate fraudulent use of compromised identities.

Organisations are also implementing measures to safeguard customers’ funds and identities.

From enhancing security protocols to promptly detecting and addressing data breaches, these institutions are striving to ensure the safety of digital transactions in the evolving financial landscape.

READ ASX digital lenders prioritise client safety amid shift away from cash – Part 1

MONEYME (ASX:MME)

Powered by smart-tech, digital lender and B Corp-certified MME offers near real-time credit decisioning and loans that settle in minutes across products such as car loans, personal loans and credit cards.

MME says protecting its customers’ data and fraud prevention are top priorities for the company. MME has invested heavily in strengthening its information security in FY24 and says it will continue to take a proactive approach to new and emerging cybersecurity threats.

As part of its financial wellness offering, MME also offers a free credit score tool, where users can see what’s listed on their credit report, including credit enquiries and negative credit events such as missed payments.

MME chief operating and product officer Jonathan Wu told Stockhead while your credit score won’t protect you from cybercriminals, it can help you spot if someone is applying for loans or credit cards in your name.

“Cybercrime is unfortunately becoming more sophisticated and if your personal data has been compromised, your credit score can be one line of defence,” he says.

“Despite the stringent security measures that MONEYME and other lenders take to protect our customers, such as using biometric ID verification, some fraudulent applications may still slip through undetected.”

Wu says here’s where your credit score comes into play with every credit application made under your name, whether approved or not, leaves a trace on your credit file.

He says regularly checking your credit score will help detect any suspicious activity early on.

“If you notice any unauthorised credit accounts or enquiries on your credit file, you should contact the credit provider as soon as possible,” he says.

Binance

When discussing the financial services transformation shaping the modern world it is also worth acknowledging the rise of digital currencies.

Central bank digital currencies (CBDCs) — digital tokens or electronic records that represent the virtual form of a nation’s currency — along with private sector cryptocurrencies are forecast to have the biggest disruptive impact over the next 20 years to the financial services industry.

While not ASX-listed crypto exchange Binance Australia and New Zealand general manager Ben Rose told Stockhead crypto crime is a very tiny fraction of all financial crimes, and continues to drop.

Rose says according to the 2024 Crypto Crime Report by blockchain data firm Chainalysis, the share of illicit transactions in the overall crypto transaction volume – arguably the most illustrative of crypto-related crime metrics – went down from 0.42% to 0.34% in 2023.

“When comparing this to NASDAQ’s recent Global Financial Crime Report, crypto constitutes less than 1% of the overall volume of global illicit funds transacted,” Rose says.

He says Binance’s priority is user protection and education with the company globally providing resources on scam awareness, such as their Know Your Scam series, and thematic content such as Romance Scam education around Valentine’s Day.

“Combating crime remains a joint industry effort and all users must remain vigilant,” he says.

“Binance actively partners with and supports global law enforcement, in combating bad actors, and assists law enforcement investigations.”

Rose says in April 2024, Binance hosted its inaugural online Law Enforcement Training Day, an educational initiative for international law enforcement, which was part of Binance’s ongoing Law Enforcement Training Program.

“The Trading Day event featured 11 speakers from industry and law enforcement, and was streamed to an audience of over 1,300 law enforcement representatives in 86 countries, mostly from national police agencies and state prosecutors,” he says.

“Binance regularly cooperates with law enforcement in Australia and globally.”

He says in 2023 Binance responded to more than 58,000 law enforcement requests, conducted, 120 workshops and training sessions with law enforcement, and completed more than 51,600 suspicious activity reports (SARs) – a 180% increase from 2022 – involving sanctions, scams, fraud, hacks, and more.

“The average response time took three days, which is faster than any traditional financial institution,” he says.

Rose says Binance keenly observes and studies how sophisticated attackers work and aims to maintain the highest levels of safety for users’ personal data and funds.

He says key to the exchange’s security is anticipating attacks.

“We need to look at everything that could threaten us – from technical vulnerabilities to human behaviour and prepare accordingly,” he says.

“Only then can we protect our users against a range of threats.”

Rose says security measures in place include multi-factor authentication, continuous surveillance, threat intelligence
monitoring, regular testing, auditing, an anti-phishing code feature and Binance Verify.

He says for a worst-case scenario Binance also has established a US$1bn secure asset fund for users (SAFU), an industry first emergency fund to be tapped if users lost assets resulting from security breaches on the exchange.

“To date, it has never needed to be used since its establishment in July 2018,” he says.