From cybersecurity to data protection to ad fraud, technology has evolved at a rapid pace and so has digital fraud, Gulshan Rai, former national cyber coordinator, Government of India, and senior advisor, Dua Consulting and Dua Associates, said. Rai was speaking at the DigiFraud Insiders Summit by Financial Express Digital in Mumbai, on Friday. “This technological evolution including artificial intelligence (AI), Web3.0, and metaverse, will have a big impact as it will decentralise applications. When technology evolves so does innovation. We are all eager to adopt innovation. At the same time, the adverse impact of innovation is the rise of fraud on digital,” he added.
However, the challenge resides in maintaining pace with such technological evolution, especially in a country like India, where one part of the society is aware of frauds, while a large part of the population residing in rural areas, is yet to be made aware. “We are at an inflection point when we talk about digital payment and digital transformation, but the question is are we ready for. Nearly 50% of the country’s system is not equipped to deal with technological advancement, leaving the systems vulnerable,” he noted.
Hence, it is imperative to work with the indigenous start-up community to create a system that can monitor traffic, sim card or virus-related issues.
The new kind of financial fraud
Financial frauds are not a new topic for Indians, as many have already lost tonnes of money. Moreover, social media platforms that host a lot many start-ups, besides e-tailers, are also home to many financial frauds. According to Amitabh Tewary, chief innovation officer, Razorpay, with a number of fraudulent transactions happening across platforms and sectors, it is imperative to incorporate customer awareness. “Almost 50% of all digital payments are through UPI. One key component of this is safety and security. Therefore, customer awareness becomes a critical factor as more people take to digital payments,” he added. As per a recent report, the number of digital transactions is estimated to touch one trillion by 2025.
Even as digital payments have eased transactions, it is packed with its own share of issues. For Mitul Mehta, chief marketing officer, Datamatics, while every company is working towards easing consumers’ journey toward digital, it is essential that businesses do not open avenues for fraudsters. In the last few years, many brands including Jubilant, BigBasket have reported cases of consumer data leakage. Interestingly, 25% of the data leaked on Jubilant-owned Domino’s platform were corporate email ids, thereby further exposing the latter to many cyber threats.
Meanwhile, Ramachandra Kulkarni, managing director, technology risk, Goldman Sachs, talked about the numerous kinds of cyber frauds. “There are three key categories such as phishing, bot activity, and brand infringement. Of this, phishing continues to be the most popular way of committing fraud,” he added. He also touched upon the destructive rise of ransomware as a service stating how these attacks have also become more sophisticated thereby delivering a bigger impact. Furthermore, on the point of phishing attacks, Babitha BP, CISO, CSB Bank highlighted that those attacks have gained more awareness during the pandemic. “Phishing is the first step towards cyberattack. Nearly 80% of the people have lost money just by clicking on a phishing mail,” she opined.
Industry experts opined that it is about time to look at methods such as biometric or cross channel authentication, QR codes, tap, and authentication methods and expand beyond simply one-time password (OTP) verification. “OTP’s are passe and it is time to look at newer methods,” Shilpi Mishra, president, and head, process, controls, and risk containment, Kotak Mahindra Bank, added.
Further, towards the end, it was discussed how cryptocurrency and non-fungible tokens (NFT) are yet other sectors that have managed to grab the attention of fraudsters. According to Anil Lale, general counsel, Viacom18, people have been taking content created by artists and converting it into NFTs. These are further sold in an open market, in this case, the dark web. It is believed this has further escalated the issue of copyright infringement. Industry experts, at the end opined, that the government needs to create separate rules for cryptocurrency and NFT, as opposed to clubbing them under digital assets.