On Wednesday, the Department of Telecom (DoT) announced the launch of ‘Financial Fraud Risk Indicators’ (FRI) to strengthen cybersecurity in internet-based financial transactions, pushing coordination with banks and financial institutions to better protect electronic payments in India from cyber fraud.
Applying fraud prevention in financial institutions will push safety of electronic transactions, which have become increasingly popular in recent years. Through real-time intelligence sharing between the telecom and financial industries, the FRI tool paves way for improved fraud detection.
Under the new system, mobile numbers flagged as suspicious will undergo extra filtering, ensuring payments to those accounts are blocked before reaching the recipient. Cyber fraud is on a rise, targeting financial institutions, and this fraud detection system arrives at a fundamental time to protect users from financial crimes.
Financial Fraud Increased During the Pandemic
The pandemic saw an unprecedented increase in online transactions, with more and more consumers taking to online banking, mobile wallets, and UPI services. Unfortunately, this also led to a spike in cyber fraud, making fraud and financial crime risk management a priority for the financial sector.
Financial institutions were finding it more and more difficult to make their platforms secure and offer security to online payments. The ‘Financial Fraud Risk Indicators’ are a fitting response, offering a smart way to detect fraud and protect digital payment channels so consumers are safer in this digital era.
The ‘Financial Fraud Risk Indicator’ offers advanced security by flagging suspicious mobile numbers. When a number is identified, other verification steps are triggered to confirm the legitimacy of transactions before they are processed, helping prevent fraud in real time.
The Fraud risk indicators system will minimize financial fraud risks only by ensuring authorized transactions are completed. By classifying mobile numbers into risk levels, Medium, High, or Very High, it opens doors for more accurate payment evaluations and triggers immediate actions to block or flag suspicious transactions.
Fraud risk indicators is a smoother, more effective anti-fraud method, which enables quicker reaction time for prospective threats. Sharing immediate intelligence between sectors by virtue of this device is most effective in closing the window of opportunity for fraudsters. Moreover, it highlights growing joint work between telecom and financial sectors.
“This action will help institutions better monitor and respond to potential fraud,” a Telecom Department spokesperson said.
By sharing key information between sectors, fraud prevention in financial services
tool not only ensures digital payments are being tracked but actively protected. PhonePe is one such platform that has already implemented this tool, using it to identify and block high-risk transactions beforehand.
Final Thoughts
The creation of the first financial bank fraud prevention is a background for more data-based policy towards cybersecurity within the online payments environment. With potential future risk-prevention technology via AI, technology holds the promise of making real-time, automated responses to emerging threats more possible.
It is a long-awaited, critical step towards building a secure and trustworthy digital economy, where fraud risk indicators and prevention are certainly becoming a more integral element to the telecom-finance foundation.
Inside Telecom provides you with an extensive list of content covering all aspects of the tech industry. Keep an eye on our Cybersecurity sections to stay informed and up-to-date with our daily articles.