As Indians are growing tech savvy, the fraudsters are also getting savvier. There seems to be a substantial increase in the number of cyber frauds as increased customers have started using mobile banking, RTGS and NEFT, reveals a new study carried out by ASSOCHAM and PwC.
Regarding this, the report – Current Fraud Trends in Financial Sector stated, whether it is financial transactions, marketing of new products, customer experience or channel distribution, the technology is the biggest driver of change in the sector of financial services. Most of the financial institutions are insisting on the paperless and cashless transactions.
As per the Reserve Bank of India, 2.2 crore bank account holders of the 58 crore total band account holders use mobile banking applications. They carry out transactions that have jumped from Rs 1,819 crore in the fiscal year 2011-12 to Rs 10,000 crore in the fiscal year 2014-15. Similarly, the mobile fraud has increased from less than Rs 10 crore in the fiscal 2011-12 to Rs 70 crore in the fiscal 2014-15.
The biggest frauds that happen in the banking sector are diversion of funds, documentation frauds, cyber related theft targeting the customers and identity theft. In the cyber frauds, the customers are deceived by means of hacking, site cloning, social engineering, debit card scheming and computer viruses among the other methods.
The report further stated that mobile banking applications are mapped to an incorrect mobile number. For instance, in the case of the bank customers who do not make use of mobile banking, a bank employee can attach an associate’s mobile number to the account and install a mobile application on the device. The account of the customer is comprised by the associate and there will not be any notification regarding the same.
As per the report, the heavy reliance on the telecom operators for the services and the prevention and detection of frauds in the mobile banking segment have become more complex.