Fintech companies are focusing on emerging technologies to identify the emergence of security
Cash transactions are considered to be a high-risk activity, cash being the most essential asset for an individual is known to be prone to risks such as transferability, liquidity, cash management, theft, currency issues. In the past few years, India has successfully moved from a cash-based economy to a developing and modern digital-based financing system, where one of the main objectives was to minimize security threats and ease transactions by promoting transparency, accountability, and diminishing transaction costs, along with decreasing the size of the informal economy.
From the successful implementation of the Pradhan Mantri Jan-Dhan Yojna, i.e., the Unified Payments Interface (UPI) real-time payment system, promotion of mobile payment services, banking services associated with biometric and Aadhaar Card, rise of fintech solutions, banks moving to digital solutions due to the competitive market, enabled the rise of digital payment systems. Moreover, due to several factors like demonetization and COVID-19, the pace of adoption of digital payments is visibly increasing and the nation is strongly driving the cashless economy. However, with the evolution of the payments ecosystem, the critical challenge of mitigating cyber-security threats is also increasing. For instance, according to a recent report in April 2020 by FIS, Fidelity National Information Services, there was almost 32 percent of credit and debit card fraud reported. Additionally, the initial months of lockdown saw a huge surge in financial losses and cyber-security threats.
Cyber-crimes and security threats were already at a hike globally when India was experiencing such a rapid growth in digital payments services and India was also not immune from such threats. Since 2010 the nation started reviewing some of the major cyber-attacks with unauthorized access and data breaches. Cyber-attackers targeted banks as well as individual users to access illegal monetary activities. The vulnerabilities here include unsecured mobile phones, lack of updated machines, deficient cyber hygiene in the system which resulted in phishing and vishing, centralised data storage, insider threat, and lack of, or insufficient, encryption. As India’s economy deepens more depending on digital payment systems, these vulnerabilities are continuing the threat landscape for cyber-attacks.
Here, fintech companies are stepping in and focusing on emerging technologies to identify the emergence of security and preventive measures to avoid frauds. They are continuously improving their technical knowledge to understand risks better and strengthen consumer-data protection. The Reserve Bank of India (RBI) has also issued several cybersecurity frameworks, guidelines, and advisories for banks and other payment-system operators. The RBI has also mandated banks to set up a Security Operations Centre to detect cybersecurity incidents and report them to the Indian Banks-Center for Analysis of Risks and Threats, along with guidelines to store payments data in India.
Also, owing to its security, consumers can follow the tips given below to ensure full security when preparing to make payments digitally.
Two-factor authentication – While using e-wallets or transacting digitally, one-time passwords or OTPs are the most secured options. It greatly reduces the risk of fraudulent activity as after the input of an e-password it expires after use.
Trusted POS systems – Customers, while swiping their cards at trusted shopping centers should check for the best and latest POS machines, as there is a high-risk of fraud due to duplicity of PIN and card details.
Activate basic security measures in your phone – Basic security measures like passwords, pins, and biometric authentication is important for security measures, especially when unlocking your smartphone, or the apps in the phone.
As we are entering a new era of customer-centricity, companies need to prioritize security while providing a good customer experience. Organisations are now rigorously focusing on enhancing security at the backend, along with reimagining security from the customer's perspective. Utilising and interacting with technology to create new experiences is now the only way to the solution and this requires organizations to shift their mindset of not only educating customers but also bringing in more awareness at the same time. Consumers should also realize that common sense while exploring the digital world is the best sense and abiding by etiquettes is the right way to keep them protected online.
The author is Member of Fintech Association for Consumer Empowerment, Co-Founder & MD Kissht