Rise of Cyber Frauds in Digital Banking

With the wave of digitization, there is drastic increase in the usage of mobile internet. The fraudulent financial transactions are rising at par too. (Approximately $20 billion I.e. Rs 1.26 lakh crore as per a report from Assocham) Financial fraud is a big business now and the figures are shooting higher in every aspect.

With the rise of young digital savvy population, banks are striving hard to accustom to the customers’ digital wallets. Even the customers are trying to get acquainted to the cashless life and in the process the vulnerabilities of the banking applications are keeping the techies on toes. The risks include phishing, identity theft, card skimming, etc.

Currently, 74% of the population has smart phones and it has given a steady rise in the usage of banking apps too. Even Reserve Bank of India has given a statistics where we come to know that the volume of mobile banking transactions have increased from Rs 1,819 crore in 2011–12 to approximately Rs 1,01,851 crore in 2014-15. It includes cashless transactions, customer feedback, bill payments or even marketing of new products. Technology has become the biggest driver of change where most financial bodies are preferring paperless transactions.

Simultaneously, online frauds in the banking sector are escalating towards alarming figures. These include digital identity thefts, online banking frauds like hacking or mysterious siphoning of funds by stealing customer data under unknown circumstances and more. In order to avoid it, the banks are insisting on educating the customers about the guidelines of secured transacting via smart phones or other devices online. Two-factor authentication is the most common among them.

Recently, more than 30 organizations around the globe have been victimized with some latest wave of attacks where the cyber crooks used compromised websites or “watering holes” to infect the users visiting those websites with some unknown malware. The banks are clueless with such incidents because there are hardly any traces or evidences of those malicious activities. The attackers redirect the visitors to some exploit kit which can install malware on those visitors. Investigations are still on to check whether these malware have historical backgrounds.

According to eScan, a timely reminder of the growing threats faced by financial institutions can save numerous fraudulence. The users or customers need to be equally alert about these concerns. There are several guidelines which can change the scenario

1) Never disclose/ write your log in details anywhere

2) To do any online transaction, never hand over your smart phone to strangers like restaurant staff, supermarket attendant, mall employee, fuel station staff etc.

3) Ensure that you have installed a reputed mobile antivirus and regularly scan your smart phone for the presence of any suspicious app or detect and mitigate any suspicious activity.

4) Lastly, there has to be a regular supervision of your banking statements so that the discrepancies (if any) can be informed to the concerned bank.

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