Banking practices spread vigorously across the nation after Demonetisation

In today’s world, which is gripped by digitisation, India witnessed a sharp inclination toward banking and e-payments in November 2016. It was the effect of cash crunch after ban of INR 500 and INR 1000 currency notes (demonetisation) that more and more number of people started opting for bank accounts. This faith in bank accounts triggered the further faith in e-payments. Besides, government began pouring several perks and security measures for the ones opting for digital/e-payments. Eventually this all led to “banking the unbanked” and majority started shifting to digital methods of making transactions.

This was the digital wave, which swept away the undying devotion to cash-oriented method of making payments in India. The same is quite evident in a finding, which reveals that India has gone up by more than 50% in terms of indulging in digital transactions.

Although, it took time for the country to be in terms with the new technology of making payments via digital platforms. Gradually, there has been a steep rise in the number of people (rural and urban areas) shifting to online payments in the country, all thanks to the awareness and perks offered by govt. On the contrary, advancing of technology at such a rapid rate do make digital methods of payment more vulnerable to fraud simultaneously for which there are fraud prevention practices.

Fraud Prevention Practices are taking a Toll on Fraud Schemes

With the rise in the complexity of fraud schemes, there is a simultaneous rise in the ways to combat the same. This implies that “minimizing potential frauds” is as imperative as bringing innovation in digital sector. It is the same technology that brings innovation, is changing payments’ mechanism for the better and, is also continuously introducing ways to combat digital payments’ related frauds. Having mentioned that, let’s take a look at some of the many ways in which technology is keeping fraud related interventions at bay-

  • Behavioural Analytics helps to monitor navigation techniques and other aspects of a user’s online behaviour. With this technology, it becomes convenient to understand any such activity, which indicates fraud or suspicion.
  • Knowledge-based Authentication implies a series of questions with answer to each typed and saved by the user. In case any of the answers typed is incorrect, it immediately takes the individual attempting an access to the payment out of the platform.
  • Password tokens are the OTPs (One time only passwords), which give the user a one-time password on their device which expires as soon as allowed time-limit of using it is crossed.
  • Automated Analysis tools are fraud analysis tools, which identify the fraud attempts in a timely manner. Solution providers tend to provide real-time transaction screening, third-party screening and compliance solutions.
  • Internal Audit function is required to keep a regular check. A regular internal audit helps to remain one-step ahead of the fraudsters and conclusively, to combat maximum fraud.

Besides, it is imperative to provide enough education from the bank’s as well as service provider’s end with regard to fraud prevention measures. Online banking is beneficial for customers/merchants for the convenience and banks for lower costs. As the fraud affects a business’ customer relationship quality and customer loyalty, an effective set of preventive measures are a must. Since technology is rapidly bringing innovative online payments’ methods, frauds are also evidently on the rise. Although, the good news is that there are fraud-combating effective technologies to adopt.

Growing Banking practices

It is without a doubt that the banking practices are growing by leaps and bounds in India. It is more so ever since demonetisation. With the help of various government initiatives to make people understand the benefits of banking, majority of the people in country have shifted toward digital methods of making payments. Be it shopping online, or at a brick and mortar store, masses have drastically shifted toward opting for making payments digitally instead of in cash. According to Economic Times, here is how online banking has made its way into the ecosystem-

Above pie chart shows that, 51% of Indians use online banking channels, whereas 26% of Indian customers prefer to access services via their bank’s website and the same number would prefer to use a mobile app rather than talk to a human agent.

Source: Economic Times

This information reveals that despite the banking fraud rearing its ugly head every now and then, the preventive measures and fraud-combating ways/technologies are impactful. The impact/effect of which is quite evident in the data above that shows growing number of online banking practices amongst masses.

Some useful tips

After all that is taking place to fix banking fraud, taking note of some useful tips can help one be tremendously safe from getting caught up in a difficult scenario/position:

Overall, as the banking sector has shifted drastically toward being digital, it is of utmost importance that masses take preventive measures in order to keep net banking/digital frauds at bay. Besides, one must also be sure to be mindful of any suspicious activity, query or misguidance. Immediate action in case of such scenarios will help one keep reaping the benefits that online banking/digital payments has to offer in today’s fast paced digital ecosystem.