Millennials are most vulnerable to FinTech fraud, according to a new North American Securities Administrators Association Pulse Survey of securities regulators. NASAA concluded that regulators, the industry and investors must be vigilant in dealing with rapidly advancing technologies.
The poll was conducted between November and December 2017 and surveyed NASAA state and provincial securities regulators in the United States, Canada and Mexico.
Significant survey findings include:
- Millennials are most vulnerable to FinTech fraud because they are the most likely to use such technology;
- FinTech risks vary widely between products: Initial Coin Offerings ("ICOs") and cryptocurrencies were considered at highest risk for fraud, while robo-advice was considered the lowest risk;
- Fraudsters are most knowledgeable about the risks of FinTech, while investors are the least knowledgeable; and
- Combating FinTech fraud is increasingly difficult.
The surveyed regulators expressed the need for the industry and its investors to scrutinize any new FinTech products and technologies, and to collaborate with regulators to identify and minimize new threats. NASAA is planning a roundtable in May 2018 to bring together industry experts and regulators to discuss investor protection concerns, necessary regulation and the development of appropriate investor education.
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