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INDIA’S DIGITAL BANKING SECURITY NIGHTMARE: REPORT EXPOSES SOARING ACCOUNT TAKEOVER AND MULE ACCOUNT THREATS
A recent report by BioCatch, a global leader in digital fraud detection powered by behavioral biometric intelligence, has shed light on the alarming state of digital banking security in India. The report reveals that account takeover attacks have become the dominant form of financial crime in the country, accounting for over half of all fraudulent activities.
Mule Accounts: A Growing Threat
According to the report, mule accounts are a rapidly growing threat, with nine out of every 10 such accounts going undetected by banks. Mule accounts refer to fake or compromised bank accounts used by fraudsters to launder money or conduct unauthorized transactions. The prevalence of these accounts represents a significant underreported plague, with every device found to participate in mule activity logging into an average of 35 accounts each.
Sophisticated Fraud Tactics
The report also highlights that while 86% of the first session of documented mule account activity came from within India, after a month, this number fell to just 20%, indicating that fraudsters are likely accessing Indian mule accounts from outside the country. Furthermore, 16% of these sessions used a virtual private network (VPN), suggesting that fraudsters are using sophisticated tools to evade detection.
Experts Weigh In
" The OTP-based authentication doesn’t protect customers against these types of scams," said Charanjeet S.Bhatia, a counter-fraud expert and former Head of Group Fraud Risk and Investigations at First Abudhabi Bank.
Bolstering Fraud Defenses
BioCatch’s report underscores the urgent need for Indian banks to bolster their fraud defenses. The company’s Director of Global Fraud Intelligence, Tom Peacock, emphasized that “the mule accounts banks succeed in identifying almost certainly represent just the tip of the iceberg.” He added that Indian financial institutions must employ more robust security measures to detect and shut down these sprawling mule networks.
Recommendations
To combat this onslaught of fraud and financial crime, BioCatch recommends that banking and financial institutions adopt integrated advanced solutions powered by behavioral biometric intelligence. The company’s APAC Vice President of Sales, Richard Booth, noted that “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.”
Upcoming Event
BioCatch will discuss the report’s findings at the BFSI Fraud Detection & Management India Summit 2024, where experts will gather to address the growing threat of financial crime. To register for the event or access BioCatch’s 2024 Digital Banking Fraud Trends in India report, please visit their website.
About BioCatch
BioCatch is a global leader in digital fraud detection powered by behavioral biometric intelligence. The company analyzes thousands of user digital interactions to support a digital banking environment where identity, trust, and ease coexist. Today, more than 25 of the world’s leading 100 banks and >100 of the largest 500 rely on BioCatch’s solutions to combat fraud, facilitate digital transformation, and grow customer relationships.