RBI Guidelines Coupled With Cutting-Edge Technology: The Way For A Secure Financial Future
RBI guidelines mention Fraud Risk Management and Mobile Payment Application Security Controls, both these segments can be efficiently addressed through behavioral biometrics.
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Imagine this for a moment. Only 8% of the world's currency exists in physical form, the rest 92% is either stored in computers or hard drives. Even in banks or other financial institutions, transactions are made through credit cards, debit cards, online banking, and wire transfers. A huge chunk of whatever you transact with, buy commodities, or earn, everything is stored through an automated algorithm. Now, does that make your money safe and out of the clutches of cybercriminals? Sadly, not completely.
As per media reports, In 2020-21, Unified Payments Interface (UPI) was worth 10% of overall retail payments, excluding real-time gross settlements. This growth was registered at a compound annual growth rate of 400% between 2016-17 to 2020-21. In fact, as of September 2021, the total volume has jumped to INR 3,654.30 million transactions worth INR 6,54,351.81 crore. This rapidly increasing practice of online transactions has brought the super volatile digital payment ecosystem in India under the radar of cybercriminals. Taking cognizance of the aforementioned stats and facts, the Reserve Bank of India (RBI) has published the latest set of guidelines to strengthen India's proliferating digital payment industry.
Furthering digital adoption in India on the back of RBI guidelines
In February earlier this year, RBI, the regulatory body for banking and payments in India published detailed and meticulously set directions for Digital Payment Security Controls. RBI created a framework for all Regulated Entities (REs), including fintech, lending companies, small finance banks, payment banks, Non-Banking Financial Companies (NBFCs), and traditional banks. The idea was to enable customers to avail digital payment products seamlessly, safely, and securely.
As per the guidelines, REs are responsible for adequately documenting and implementing the configuration aspects for detecting suspicious transactions. Fraud analysis will be mandatory as REs will be accountable for identifying the reason behind the fraud occurrence and setting parameters to prevent such instances in the future. The staff and RE employees are subjected to formal training exercises in various segments, including investigating fraud techniques and procedures, using fraud detection tools, and communicating with law enforcement authorities.
As the banks and financial institutions move forward to comply with these new digital payment security directives, they are adopting automation tools like artificial intelligence and machine learning along with advanced technologies like behavioral biometrics to strengthen their payment methodologies. To aid banks and FinTech institutions with these compliance requirements and avoid penalties, a handful of digital identity and cybersecurity companies have mapped out ways through which cutting-edge technology can help with adequate compliance.
As per experts, RBI guidelines mention Fraud Risk Management and Mobile Payment Application Security Controls, both these segments can be efficiently addressed through behavioral biometrics. The question is, what exactly is behavioral biometrics?
Decoding Behavioral Biometrics
In the present-day ecosystem where physical currency transactions are nimble-footed, automation tools can be powerful and fickle simultaneously. Leveraging machine learning algorithms, behavioral biometrics can verify whether a user is authentic, who they claim to be, or an imposter carefully setting an automated attack. Since every user has a distinctive digital behavior, behavioral biometrics detects and tracks each insight, from the way users hold their phone, typing velocity, scrolling, and ferociousness while clicking -- everything is meticulously monitored and analyzed continuously throughout a user's web or mobile session. This allows fraud teams to confirm the users’ intent throughout a session and flag risky behavior at any time.
According to digital identity payment experts, many leading banking institutions globally have already onboarded behavioral biometrics to prevent any cyberthreat. Behavioral biometrics is already proving remarkable in exposing advanced fraudulent attacks and cyberthreats, while safeguarding banks and financial institutions against Remote Access Tools and Malware on mobile tools.
Summing Up: Pivotal new-age tools for better customer experience
Apart from adopting new-age technology and introducing automation tools, it is extremely important for banks and financial institutions to train their staff members about using fraud control tools. Needless to say, behavioral biometrics and contemporary technology enhance customer confidence, experience, and overall profitability. RBI guidelines are indeed capable of elevating customer trust and accelerate digital payment adoption in India, however banking institutions also need to level up their security game to ensure their customers are in safe hands.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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