One of the challenges for policymakers is to ensure that new innovations in the banking sector enhance the range and access to products in a manner that is safe.
Even as Prime Minister Narendra Modi takes steps to boost Digital India, RBI has highlighted that the safety involved in digital payments is still a security issue. One of the challenges for policymakers, especially in countries like India, is to ensure that new innovations in the banking sector serve the customer by reducing the cost of financial services and enhancing the range and access to products in a manner that is safe, said RBI Governor Shaktikanta Das. Advanced analytics and real-time monitoring of emerging cybersecurity risks will be critical in detecting potential threats and enabling pre-emptive action, he added.
Speaking about the cases related to online frauds, G. Kishan Reddy, MoS, Ministry of Home Affairs said in Lok Sabha that with the rapid increase in the use of cyberspace, the number of cybercrimes including online frauds is also increasing. As per data maintained by National Crime Records Bureau, 3466 and 3353 cases of online frauds were registered in 2017 and 2018, respectively.
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In terms of only debit and credit card frauds in the country in FY19, there were more than 52,304 cases of frauds that involved nearly Rs 150 crore, according to the data provided by Anurag Singh Thakur, MoS, Ministry of Finance, in a reply to a question in Lok Sabha. Even in the half-year of the current fiscal, the cases of such frauds stood at 30,965 involving Rs 100 crore.
However, the rising cases of fraud with a rise in the scale of digital payment are perceived as normal by the experts. Since digital payments are new to India, consumer education and awareness is a major roadblock in tackling the security issues, said Kaushik Roy, Vice President and Country Leader, South Asia, ACI Worldwide told Financial Express Online. Appreciating the government’s efforts in expanding the scope of the digital payments in India, he added that in the rural areas, people share their mobile phones among family members and sometimes across households, which makes them vulnerable to cybercrimes.
Speaking on the technological prevention of such frauds, Kaushik Roy said that the Fraud Risk Management Software (FRMS) is in place but real-time transactions need real-time measures to detect frauds, which is quite difficult to achieve. He further added that the common belief is that frauds are channel-wide such as UPI fraud or card fraud but the reality is that the frauds are enterprise-wide. It means if the identity of a person is compromised, all the channels of payments can be affected.