Fintech, also known as Financial Technology<\/a> aims to automate and improve the delivery of financial services. It integrates technology with offerings presented by financial companies, making it easier to serve customers.<\/p>\n Some examples of Fintech include Crypto apps, peer-to-peer (P2P) lending apps, investment apps, robo-advisors, and payment apps. While this improvement has revolutionized finance, it also opens the door for human rights abuses.<\/p>\n This article will explore Fintech and the challenges to human rights, revealing how Fintech even aids traffickers alongside ways institutions can rectify this misfortune.<\/p>\n The advent of Financial technology has allowed monetary institutions to grant people access to business capital, send and receive money, access wider loans with lower interest rates, and more.<\/p>\n Unfortunately, this industry isn’t subject to the same strict regulation as traditional banks, making risks to humans easier to surface in this rapidly growing industry.<\/p>\n These human rights risks include:<\/p>\n Fintech allows financial institutions to offer monetary services to individuals, and granting people access to loans is among these services. Unfortunately, some loan companies have predatory lending practices that exploit desperate persons.<\/p>\n Predatory lending<\/a> happens when lenders impose deceptive, abusive, or unfair loan terms on individuals. This unfortunate contract often comes with high-interest rates and fees, which can strip borrowers of equity and demote the borrower to a lower credit score, while benefiting the lender.<\/p>\n This problem exists globally but is most significant in developing countries, with a good example being the presence of multiple fast-loan apps in Nigeria. These Nigerian lenders offer high-interest quick loans with no collateral to desperate borrowers who then struggle to pay, resulting in a perpetual cycle of debt.<\/p>\n Furthermore, these fraudulent lenders use shame tactics to persuade borrowers to pay the borrowed money alongside the accumulated high-interest rate. Fortunately, Google removed the majority of Nigerian loan apps<\/a> for proper inspection.<\/p>\n Fintech has four aspects<\/a> including Artificial intelligence (AI), blockchain, cloud computing, and big data. Big data assists FinTech companies in predicting and staying ahead of customer expectations, resulting in better service.<\/p>\n This data can be acquired from a user’s phone or other methods and often includes:<\/p>\n The problem arises from these data procurement approaches as users have little to no control over how these entities collect this information. Some financial startups may use a permission approach, granting the institutions access to customer financial activities and data.<\/p>\n This permission-based access<\/a> is problematic, especially when determining the blame for damage when leaks and mistakes occur. Nevertheless, having little to no control over one’s privacy when using an essential piece of technology raises ethical questions about the Right to Privacy violations.<\/p>\n A Cyber-attack is the biggest problem that Fintech faces today, with hackers targeting different financial institutions. These malicious activities result in the user’s personal account information (bank accounts and credit card numbers) and finances being stolen.<\/p>\n This online bank robbery has become prevalent in recent years with Cybersecurity statistics revealing that approximately 2,200 cyber attacks happen daily<\/a>. Furthermore, these data breaches can cost around $9.44M, totalling $8 trillion by 2023.<\/p>\nThree Risks Fintech Pose to Human Rights<\/h2>\n
1. Predatory Lending Practices<\/h3>\n
2. Breach of Privacy<\/h3>\n
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3. Cybersecurity<\/h3>\n