Mumbai/Tel Aviv: BioCatch, a digital fraud detection provider utilising behavioral biometric intelligence, released findings which indicate that account takeover constitutes over 50 percent of all fraud cases reported by its customers in India.
The findings emerge following a recommendation from the Reserve Bank of India (RBI) urging financial institutions in the country to discontinue the use of text-based one-time passcodes for secure authentication.
BioCatch customers observed higher mule activity (14% of the total) in Bhubaneswar compared to any other location in the country, with Lucknow and Navi Mumbai contributing 3.4% of recorded mule activity, according to the report.
“The existing OTP-based authentication doesn’t protect customers against new-age frauds, including customer-initiated fraudulent transactions,” counter-fraud expert and former Head of Group Fraud Risk and Investigations at First Abudhabi Bank Charanjeet S.Bhatia said in response to the RBI recommendation.
“With the right technology and implementations, banks can do a lot more than what they are currently doing to protect customers.”
In its 2024 Digital Banking Fraud Trends in India report – BioCatch is focusing solely on any one nation offering an in-depth look at the latest fraud risks and prevention strategies for banks in the country as they rapidly employ digital transformation strategies. The report’s findings analyse more than 350 million sessions in the month of December alone.
The findings are-
Accounting for 55% of all fraud in India, third-party account takeover fraud still represents a bigger slice of the fraud pie than the social engineering scams seen exploding elsewhere.
Mules a massively underreported plague: Every device found to participate in mule activity in India logged into an average of 35 accounts each.
Fraudsters likely accessing Indian mule accounts from outside the country: While 86% of the first session of documented mule account activity came from within India, after a month that number fell to just 20% – and 16% of those sessions used a VPN.
BioCatch customers saw more mule activity (14% of the total) in Bhubaneswar than anywhere else in the country: Lucknow and Navi Mumbai accounted for 3.4% of recorded mule activity, two cities in West Bengal – Bhagabatipur and Gobindapur – 1.7% and 2.6% respectively, Mumbai 2.2%, Bengaluru 1.8%, and Cuttack 1.6%.
The report emphasizes the critical need for Indian banks to strengthen their fraud defenses. Successful financial institutions in the area are deploying integrated advanced solutions, such as BioCatch’s next-generation portfolio for financial crime detection and prevention, which utilises behavioral biometric intelligence.
“The fraud threats we see in India are a mix of both common threats seen globally and unique threats we find only in this region,” BioCatch’s APAC Vice President of Sales Richard Booth said. “All around the world, we’re seeing explosive growth in mule activity, fraud attacks, and scams that grow more sophisticated by the day. To combat this onslaught of fraud and financial crime, BioCatch continues to believe that banking and financial institutions need as much intelligence on the criminals, their tactics, and their fraud arsenals as possible. Our India report provides much-needed intel, and hopefully spurs these banks to rapidly adopt advanced defenses to stay ahead of a ceaselessly innovating group of fraudsters and criminals operating domestically and around the globe.”
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