Moving money around has never been easier in today’s digital age. Almost everyone is familiar with acronyms like UPI, IMPS, NEFT, and RTGS, even if they don’t know what they stand for. These systems form the financial superhighways of our economy, ensuring money flows as effortlessly as blood through veins. This financial innovation is part of the “Digital India” initiative, aimed at transforming the country into a digitally empowered society. But with great power comes great responsibility—and new challenges.
While Digital India is a technological marvel, it has inadvertently given rise to new forms of financial fraud.
The ease and simplicity of moving money have unfortunately benefited fraudsters too. According to the recent RBI annual report, there has been a staggering 300% increase in the number of financial fraud cases over the past year, although the total amount of fraud has decreased by nearly 50%. This suggests that fraudsters are now targeting smaller amounts, making it easier to commit fraud frequently.
However, there is hope. The RBI, MHA, and banks are collaborating to implement robust measures to track and prevent fraud. Public participation plays a crucial role in this fight. The National Cybercrime Reporting Portal (NCRP – https://cybercrime.gov.in/) and the SancharSaathi (https://www.sancharsaathi.gov.in/) portal from the Department of Telecommunications (DoT) empower citizens to report suspected frauds. For example, complaints on the SancharSaathi portal can lead to the suspension of fraudulent mobile numbers, which are then added to a negative registry used by financial institutions for KYC and monitoring.
The NCRP portal, developed by the Indian Cybercrime Coordination Centre (I4C), enables banks to track the flow of funds across Indian banks, helping recover customers’ funds. Banks can also leverage information from NCRP to block fraudsters from accessing their accounts. Information from SancharSaathi and NCRP, along with the Central Payments Fraud Information Registry (CPFIR), creates a comprehensive database of frauds that financial institutions can check against to prevent further fraud. When enriched with customer demographic markers, this information becomes a powerful weapon against fraud. Banks are increasingly focused on using this data and leveraging tools such as Clari5™ (https://www.clari5.com/) to fight fraud and protect their customers’ interests.
Humans remain the weakest link in combating financial fraud. From the misuse of authority to citizens not practicing digital safety, vulnerabilities abound. Strengthening this human element is crucial. By leveraging advanced tools like Clari5™ and fostering greater public awareness, we can protect our financial systems and ensure that the technological marvel of Digital India does not turn into a modern-day monster.