CHENNAI:Even as the National Payments Corporation of India (NCPI) disrupted digital payments business through the launch of the Unified Payments Interface (UPI) in 2016, the need for greater technology and restrictions to prevent fraudulent transactions through the platform has grown manifold, giving rise to risk management operations extended by fintech and payment technology firms like FSS.“There are a number of issues related to UPI-based transactions, and the main cause of all is the lack of mandates by the NPCI to service providers like Tez and PhonePe,” said Kislay Chaudhary, Cyber Crime Cell, Delhi Police.
Nearly 50-53 per cent of victims of UPI-based frauds are usually unaware of the existence of such a service and are conned by fraudsters who procure the last four digits of their debit cards and one-time password, he said.Even as nationalised banks have started spending on Artificial Intelligence (AI) and machine learning to prevent such frauds, the availability of data sets of customers in different value chains with the banks is limited. “This is where we can emerge as a service provider,” said Suresh Rajagopalan, President, Products Business, FSS.
To prevent just one per cent of the population from conning the 99 per cent, banks feel the need to tighten practices that the 99 per cent of their customers grapple with. The launch of the UPI technology calls for the need to integrate risk management practices across all banks in the country into a single framework.
Fintech companies that have end-to-end transaction services that include issuing, acquiring to switching and reconciliation might already own large amounts of data of customers across different banks.
This data combined with AI tools are what banks need to prevent frauds in real-time transactions, Suresh said.“The omni-channel behaviour of a customer is an important measure to identify and prevent fraud. For example, a gullible customer who has been making payments only through the website or on paper suddenly initiates a payment request via a mobile app, we’d be able to provide a real-time alert to the bank to stop the transaction,” said Suresh.
The launch of UPI 2.0 by the NPCI, extending payment services to merchant sites like Foodpanda calls for the immediate use of big data capabilities, AI and machine learning tools to stop frauds around such technology.Risk analytics, a larger domain that helps prevent frauds and includes tools that help banks to take decisions regarding credit and loans, is expected to grow from $18 billion in 2017 to about $35 billion by 2022, FSS said.