India’s digital economy is under increasing threat of cyber attack with the country’s digital fraud rate seen to be nearly twice the global average, according to a new report by TransUnion. The findings also underscore the growing sophistication of such online fraud as digital payments, e-commerce and financial services are still thriving in India.
The report shows that India had a much higher rate of suspected digital fraud attempts compared to the global average during the study period. Digitalization was fast and online and mobile applications for banking, shopping, and payments were more common in the country.
With the increasing demand for digital services from consumers and a growing number of people who are also turning to digital services every day, cybercriminals are also developing more sophisticated means to exploit the market’s weaknesses. Phishing scams, identity theft, account takeovers, fake investment schemes, and social engineering techniques are increasingly being used by fraudsters to target individuals and businesses.
Financial services are still among the most targeted sectors as the volumes of digital transactions are high, according to TransUnion. But fraud attempts are also rising in e-commerce, telecommunications, travel, insurance, gaming, and any online sector, where digital identities and payment information are frequently used.
Digital fraud is surging and the rise in digital fraud is due to the rapid development of India’s digital economy and the sophistication of cybercriminals, industry experts say. Digital adoption has increased convenience and financial inclusion but has also widened the attack range for fraudsters to take advantage of unsuspecting victims.
The report highlights various innovative fraud detection technologies, artificial intelligence, machine learning, behavioural analytics, multi-factor authentication, etc. (e.g. in the case of malware) and cybersecurity as being the key to combat digital threats. Financial institutions and online platforms are investing in real-time monitoring systems to identify suspicious transactions before they cause losses to the company.
Consumers also play a huge role in preventing online fraud. There’s no need to share one-time passwords (OTPs), PINs, passwords, or banking credentials with anyone, experts say. People must verify website authenticity before they pay, enable two-factor authentication wherever possible, keep track of their bank statements and not click on suspicious links in their e-mails, texts or calls.
India’s digital payment ecosystem has grown rapidly in recent years with the explosion of smartphone adoption, Unified Payments Interface (UPI), internet banking and digital wallets. While this transformation has significantly brought financial accessibility to a much larger extent, it has also made us much safer and more aware of the threat from cybersecurity.
Regulators, banks, technology companies and financial institutions are still strengthening security frameworks through new authentication processes, fraud tracking systems and customer education programs. Work in partnership with public and private sector organizations will have a major impact on reducing cyber fraud risk in the future.
The findings from the TransUnion report are a strong reminder that cybersecurity should evolve as well as digital innovation. With India's digital economy booming and the number of people that use it becoming a business and consumer as well as an enterprise in India increasing, businesses and consumers will have to be wary of increasingly sophisticated fraud.
Efficient digital security, advanced fraud prevention technologies and awareness of users will be key to the trust and development in India’s growing online financial ecosystem and sustained growth in digital commerce.
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