Technology-related banking frauds in India have fallen in the last four years, thanks to banks stepping up checks on online transactions.
Between fiscal 2009 and 2013, they spent Rs 350 crore on manpower and machinery, and this is paying off.
According to the Reserve Bank of India, the number of frauds has been going down since 2009.
In FY13, 8,765 tech-related frauds were reported, a 13 per cent drop over the previous fiscal.
“Investments to check tech frauds are being made on all fronts — technology, people and filters,” says Rajiv Rai, COO, Retail Banking at Deutsche Bank.
The process is ongoing as banks have to keep pace with hackers and fraudsters who are refining their methods each day.
Banks regularly monitor rogue Web sites that ape the real ones.
Monitoring
Banks are also implementing an adaptive authentication system. This involves having dedicated teams for monitoring online transactions and spotting any deviation from the regular pattern.
“Every single Net banking transaction has a risk-based scoring. If we spot any unusual behaviour (such as a transaction being made from a PC different from the regular PC or two quick transactions from different locations), we either decline it or go for a step up authentication,” says Vishal Salvi, CIO at HDFC Bank.
“Depending on the type of transaction, we keep changing our authentication,” he adds.
SMARTPHONE RISKS
Deustche Bank has introduced digital certification for large corporate transactions to ensure they are not compromised while on the way to the server. “Corporates need to acquire a digital certificate from an accredited agency. Nobody can tamper with such a transaction. We are starting with this implementation,” says Rai.
With the proliferation of smartphones and broadband services, the risk of i-banking frauds has gone up. According to a recent Norton Report on cyber crime, 42 per cent of Indian Wi-Fi users access their bank accounts through public or unsecure networks.
Since banks send all transaction alerts and one-time passwords on mobiles and through e-mails, duplication of SIM has become a favourite with fraudsters.
“Many customers are using the mobile phone to access the Net. So mobile phones have become a critical link. Also, a lot of users do not follow the basic measures of securing their computer from virus attacks and not sharing sensitive personal information,” says Rajiv Anand, President, Retail Banking at Axis Bank.
All the major banks are also undertaking customer education and awareness programmes on i-banking frauds. All these will increase operating costs for banks, but then, as Rai of Deutsche Bank puts it, these costs would be less than what the banks would incur in making good customers’ losses.