By Animesh Jha- Vice President, Engineering – Fraud & Risk Management Wibmo, A PayU Company
In recent years, the rapid advancement of technology has transformed how we conduct our financial transactions, but it has also brought about a surge in online payment fraud. One such example is the dreaded email phishing attack. With access to the latest technologies, cybercriminals can mimic trusted entities like banks or e-commerce platforms. Suppose an email notification pops up in your inbox. It is from your bank, requesting that you click on a link and fill in your banking or personal details, citing a need for account verification. You click the link, leading to a seemingly genuine web page where you enter sensitive data. And once this is done, you give access to your personal and financial information to cyberattackers. The repercussions of falling victim to such phishing attacks can be devastating, from unauthorised transactions draining your bank account to identity theft.
Current Digital Payments Scenario in India
Government initiatives, innovation in the payment landscape, increased smartphone penetration, and easy access to mobile internet accelerated the rapid adoption of digital transactions in India. As per a report, almost 114 billion digital payments have been recorded nationwide in the current year. It is not surprising to know that the rising trend of digital adoption in payments has also opened the door to a growing online threat. Hence, it is paramount for businesses to explore the power of advanced fraud prevention in digital payments, focusing on the crucial role it plays in safeguarding financial security.
The role of advanced fraud prevention
As the threat landscape evolves, so does the technology designed to combat it. Advanced fraud prevention systems have emerged as a critical defence against various forms of online payment fraud. Let’s discuss how these systems work:
Behavioural Analysis: Advanced fraud prevention tools employ machine learning and artificial intelligence to analyse user behaviour patterns. By monitoring your typical online activity, these systems can identify deviations that may indicate anomalies. For instance, if you usually log in from a specific location and suddenly attempt to access your account from a different country, the system may flag this as suspicious.
Multi-Factor Authentication (MFA): MFA adds an extra layer of security by requiring users to provide multiple verification forms before accessing their accounts. This might include a password, a fingerprint, a one-time code sent to their phone, or biometric data. Even if a cybercriminal obtains your password through phishing, MFA can prevent them from accessing your account.
Real-time Transaction Monitoring: Many advanced fraud prevention systems monitor transactions in real-time, looking for unusual or suspicious activity. If a transaction appears out of the ordinary, it can be flagged, subject to additional verification, or blocked to prevent fraud.
Continuous Updates: Advanced fraud prevention systems are continuously updated with the latest threat intelligence and patterns to stay ahead of cybercriminals. This ensures that they can adapt to new and evolving tactics that fraudsters use.
The rapid advancement of technology has undoubtedly made our lives more convenient, but it has also given rise to new and complex security challenges, particularly in digital payments. According to the Reserve Bank of India’s (RBI) Annual Report 2021–22, fraud using cards and internet banking was 34% higher compared to 2019–20. The advanced technology used by fraudsters shatters customer confidence in digital payment instruments. Hence, adopting steps to mitigate the risks of such financial fraud is imperative. Advanced fraud prevention in digital payments is not just a technological marvel; it’s a safeguard for your finances and peace of mind.