Best of 2021 – The Rise of Online Banking Fraud in India

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As we close out 2021, we at Security Boulevard wanted to highlight the most popular items of the year. Here’s the next in our series of the best of 2021.

With the significant increase in the use of digital systems over the years, there has been a rapid increase in cyber fraud around the world. Cybercriminals have become much more sophisticated, making it harder for organizations to defend against cyber threats.

As technology advances, we are even more dependent on the internet today. Everything we do can be done online, including work, entertainment, shopping and banking. The Internet has greatly simplified everyday tasks.

However, this has also led to a drastic increase in cyber crimes around the world. Seeing how Indians have started doing more online banking transactions now, the number of online banking frauds in India has increased significantly.

According to the RBI annual report, bank frauds of ₹100,000 and above more than doubled in value to ₹1.85 lakh crore in FY20 from ₹71,500 crore in FY19. As well, the number of such cases increased by 28% during the same period.

However, the financial industry has made constant efforts to secure systems and users. But malicious actors trick people on the internet through various means to steal their money or sensitive information.

According to a report by Hindustan Times, India lost a total of ₹615.39 crore in over 1.17 lakh online banking fraud cases from April 2009 to September 2019. The occurrence of these frauds is spread over a decade. But the banking sector is experiencing a significant increase in the number of online banking frauds.

There was a concentration of high-value fraud, with the top 50 credit-related frauds making up 76% of the total amount reported as fraud in 2019-20. Incidents related to other banking areas, such as off-balance sheet transactions and foreign exchange transactions, decreased in 2019-2020“, says RBI.

₹129 crore was lost in the last three months of 2019 and a total number of 21,041 such cases were recorded in these three months”, Anurag Thakur, MoS, Ministry of Finance told Lok Sabha in reference to recent online fraud in India.

How to prevent online banking fraud?

Consumers aren’t the only ones facing online fraud. With the increasing number of data breaches and fraudulent emails targeting retailers and organizations, businesses are increasingly exposed to the risk of online fraud.

Becoming the target or victim of such fraud not only disrupts business operations. It also causes the organization to lose customer trust, brand reputation and sensitive data.

It is therefore essential that organizations adopt certain cybersecurity measures to avoid learning a costly lesson, which can often lead to more serious consequences.

Best practices for preventing online banking fraud:

  • Keep financial data separate

Organizations should use a separate system dedicated to performing financial transactions and regularly backing up data to an external drive. Also, restrict or limit access to financial information and data.

Banks never ask for personal information by phone, email or text message. Therefore, avoid sharing PINs, passwords, or your organization’s financial information without proper verification.

Create a strict password policy to avoid risks of password sharing at work. Also, never leave files containing access to financial information in an unsecured location. Also, make sure you always leave your computer locked when it’s unattended.

  • Manage user authentication

Restrict email/IP address locations to allow only authorized users to transact on behalf of the organization. Make purchases only from authorized and legitimate websites and review the organization’s financial statements regularly.

Educate employees about cybersecurity with tools such as ThreatCop. It helps in simulating cyber attacks to check the number of vulnerable employees in your organization and train them accordingly.

Providing this training familiarizes employees with attacks and gives them the knowledge of what should be done when such attacks occur.

Where to report online fraud in India?

In case you failed to take the necessary precautions and become a victim, you are strongly advised to immediately file a complaint with the local police or cybercrime authorities.

Also, as soon as you realize that a suspicious transaction has been made from your bank account or debit/credit card, notify the relevant bank immediately.

Online banking scams and frauds are constantly evolving and increasing rapidly over the years in India. Organizations should come up with more comprehensive and complex cybersecurity measures to protect the business and customers.

Additionally, every industry should embrace a culture that adhering to cybersecurity protocols is not a necessity but an obligation.

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The post The Rising Online Banking Frauds in India appeared first on Kratikal Blog.

*** This is a syndicated blog from the Kratikal Blog Security Bloggers Network written by Richard Singha. Read the original post at: https://www.kratikal.com/blog/the-rising-online-banking-frauds-in-india/

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