Digital payment fraud

THE discussions at a meeting convened recently by the Centre on issues related to financial cybersecurity and digital payment fraud left no one in doubt about the enormity of the challenge at hand. It was revealed that nearly 70 lakh mobile phone connections involved in cybercrime and financial fraud have been disconnected so far. A sum of Rs 900 crore lost by 3.5 lakh victims has been recovered. Widespread user awareness about cyber fraud and improved multi-agency coordination emerged as the core elements of the strategy to tackle the menace. Improving response time in handling alerts on online fraud and enhanced information sharing, it was stressed, could provide the decisive edge in dealing with scamsters.

Cyber threats are constantly evolving, exposing vulnerabilities in the digital infrastructure. For banks and other financial institutions, beefing up systems to prevent, detect and act needs to be given utmost priority. The key area of focus is tackling mule accounts, which are typically bought over by fraudsters from their original users for depositing money. Banks have also been asked to step up monitoring of dormant accounts that suddenly become active with money transfers. A significant suggestion is the appointment of nodal officers to cater to the requirements of law enforcement agencies. States have been told to ensure data protection with regard to the Aadhaar-enabled payment system fraud reported recently. Tighter know-your-customer norms for financial services have been recommended.

It is estimated that 87 per cent of Indians have adopted financial technology, against the global average of 64 per cent. Building a robust cybersecurity infrastructure requires high levels of investment and commitment. The Centre must continue playing its role of a facilitator, pushing the public and private sectors to deepen defences, expand detection capabilities and improve the response mechanism.