Call it the demonetisation effect or the impact of digitization, the rise in number of Indians with a bank account is certainly rising. But along with this rise in number of cardholders, there is also a rise in digital payments, and subsequently it implies a rise in instances of payment frauds.
Over the last many months, more Indians have been jumping on to the "digital-bandwagon" and are embracing newer means of gathering news & information, entertaining themselves, expressing themselves socially, shopping, availing content & services – including financial transactions through online modes.
This adoption is incredible and heartening since it has clearly diminished the social class divisions and can be called as an equalizer of sorts.
A report on Digital Consumer Insights 2018 published by Experian says 9 out of 10 Indians were consumers of digital services.
Now the bad news: 1 in every 4 Indians has been the victim of online frauds – most of them while transacting online.
It is also interesting to know that despite having experienced fraud, a major chunk of Indians refused to switch their service providers- 57% when frauds were reported with telecom companies, 54% when the engagement was with banks and 46% when it involved retailers.
The same report states that 50% Indians were most comfortable sharing data with banks and an almost equal percentage were willing to share personal data in order to avail of service offerings.
This tendency of trusting one's "bank" (or someone posing to be from a bank) and the temptation of freebies seems to be the crux of the issue.
The latest adopters of the digital playground in India are either ignorant of the risks of their behaviour or do not exercise enough care and discretion.
As a result, they end up compromising their privacy and personal & confidential details when submitting data online through mobile devices and various channels.
This could be by way of responding to vishing calls, phishing emails & SMSes, clicking on embedded hyperlinks in spam mails and pop-up windows etc.
As many new adopters of digital technology lack the maturity to discern between what constitutes risky or irresponsible behavior and what does not, they fall prey to fraudsters.
Many end up losing their life-savings when responding to online lotteries, job offers or get-rich-quick schemes, or unwittingly surrender their banking credentials to fraudsters, thus even bypassing the multiple layers of security built by their banks or financial service providers.
Imposters posing as bank or Credit Card Company employees gain the confidence of their victims through social engineering and manage to extract their account or card information to misuse for fraudulent transactions.
Securing the PINs, be they of cards or smartphone-based banking/financial services apps is also a key area where most new adopters do not pay enough attention.
Setting up the same PIN for multiple cards and apps makes a fraudster’s job easy; the same way that access to email accounts and mobile phones/ SMSes is protected (or not protected) by newbies.
If one loses access to their phone, any out-of-band verification/second factor authentication messages sent by the bank or service provider would breach both the email & SMS channel security, as the fraudster has access to both on the victim’s phone.
People in India new to digital platforms need to remember a few key things to avoid being duped: Not to be greedy and share their card/account/login details or passwords to qualify for free gifts or cash rewards and not to be prone to any coercion by their "Service Provider" to block or terminate their services if they do not confirm some personal details.
Everyone has a basic duty not to be careless and to keep their common sense about them so as to protect themselves.
Niranjankumar Upadhye is the General Manager for Fraud Risk Management division at Worldline India.