Amidst the COVID-19 pandemic, along with debit and credit cards, digital payment platforms have gained popularity amongst a large number of customers in the past few months. With growing digital transactions, various banks are exploring real-time data analytics to curb all kinds of transaction fraud.
The rapid adoption of digital payments in India and the entry of new age payment channels like UPI, Paytm, and Goole Pay have not only made digital transactions easy, they have also made risk management an important focus area in the payment ecosystem.
Ramki Gaddipati, Co-founder and CTO, Zeta says, “Cyber-banking fraud is witnessing an upward trend, especially during recent times. A minor security breach affects the diligently built confidence of customers.”
In a survey conducted by McAfee in 2019, one-fourth of Indians confessed to having been deceived by phishing scams over phone, email, or text. To address this, the Reserve Bank of India has been implementing regulatory measures, along with tech innovations to keep users safe and provide protection for any digital transaction.
Risk and security measures in the Indian payment landscape
With growing digital transactions, various banks are exploring real-time data analytics to curb all kinds of transaction fraud. Currently, India has the 2nd highest volume of debit cards issued globally, with approximately 816 million debit cards and over 56 million credit cards in circulation. Hence, RBI has been trying to curb card-related fraud. Additionally, fintech companies are also developing password-less authentication to ensure the safety of debit or credit card users.
Taking the next step, banks have initiated educational programs for account holders to be cautious about various risks in the card-based transaction. On a regular basis most top banks reach out to there customers warning about such frauds, they also train for some basic steps to mitigate such risks.
Amidst the COVID-19 pandemic, along with debit and credit cards, digital payment platforms have gained popularity amongst a large number of customers in the past few months.
According to a report named ‘India Digital Payments Report 2019’ from the payments company Worldline India (WI), UPI is one of the most preferred modes of payment in terms of volume followed by debit cards and credit cards. In 2019, UPI recorded a transaction volume of 10.8 billion approximately.
Gaddipati of Zeta says, “RBI’s consumer protection norms are now in place to ensure the safety of the consumers by analyzing the loopholes in current systems in parallel with these solutions, regulators have taken some bold measures to tighten the payment security space. This evidence lies in RBI’s circular issued on January 15th, 2020 to banks and card issuers.” The RBI’s circular underlines the importance of using technology and to give consumers greater control over their payment instruments. He further adds, “To successfully achieve RBI’s directive, banks and card issuers can leverage modern fintech platforms, which will also help them offer their customers meaningful and secure banking experience.”
Here is how Banks and FinTech companies are offering the best of both worlds
Traditional banks are currently trying to adjust to the realities of digitalization, advanced technology, and increasing consumer demands. Gaddipati of Zeta says, “The banking ecosystem is in a state of transformation as we gear up for the ‘new normal’. FinTech companies and Banks are now moving ahead from a competitive perspective and collaborating as the best of each other towards long-term growth.”
The new RBI directive on physical, virtual, and contactless cards requires banks and card issuers to provide services like modifying transaction limits and card on/off option as per the cardholder’s convenience. Moreover, these services have to be available to customers through multiple channels, 24×7.
Experts say with the modern banking system, bank consumers will soon lookout for value, services along with tested secure measures and convenience. Gaddipati says, “Opting to partner with platforms that have been built with a mobile-first approach will be key for banks to get up to speed with these expectations. Along with this, banks need to consider platforms equipped to integrate seamlessly with existing banking systems. Thus, reducing costs and implementation time, while accelerating their go-to-market strategy.” With regulatory bodies in India and outside working proactively to introduce safety measures, industry experts say there is going to be a lot more collaboration between banks and FinTech.