A study by researchers at IIT Madras has found that victims of financial cybercrime in India are often highly educated professionals, challenging the perception that those who fall prey to online fraud are primarily careless, financially unaware or greedy.
The study found that even high levels of digital literacy do not necessarily protect individuals from cyber fraud.
The victims interviewed included IT professionals, bankers, doctors, management and finance professionals, public-sector officers and individuals with cybersecurity certifications, according to a release issued by IIT Madras on Tuesday.
India's rapid digital transition — driven by near-universal mobile access, UPI and the wider Digital India push — has brought hundreds of millions of first-generation users into digital finance within a decade. This has also created a vast attack surface for investment and stock-trading fraud, task and job scams, digital payment fraud, malware attacks and the distinctly Indian "digital arrest" scam.
While official statistics from the Indian Cyber Crime Coordination Centre (I4C) capture the scale of financial transactions involved in cybercrime, they offer little insight into the human trauma behind the numbers. This prompted the research team to examine cybercrime from a human, rather than purely technical, perspective.
The researchers found that victims were often targeted during periods of stress or major life disruption, including illness in the family, retirement, job searches and workplace pressure.
Fraudsters exploited fear, financial expectations and concerns about reputation to create what the researchers described as an "engineered brain freeze". Victims reported experiencing a state of "mind arrest" that impaired their ability to think clearly and respond rationally.
Financial losses ranged from a few thousand rupees to more than Rs 1 crore. Victims also reported shame, insomnia, depression and a loss of trust within their families.
The study found that institutional responses varied. While some banks and cybercrime cells responded quickly, others lacked the technical capabilities and coordination needed to intervene effectively.
The findings are based on semi-structured interviews with 33 victims — 22 men and 11 women, including 12 senior citizens — across Chennai, Bengaluru, Hyderabad, New Delhi and Mumbai.
The interviews were conducted in English, Hindi and Tamil and analysed using the Gioia methodology.
The study was led by Prof. P Kandaswamy, IPS (Retd), and Prof. Nandan Sudarsanam of IIT Madras, in collaboration with Prof. Akanksha Jaiswal, Associate Professor at The University of Western Australia, Chennai Campus, and Prof. Ameeta Fernando of the Loyola Institute of Business Administration, Chennai.
The research received support from the Wadhwani School of Data Science and Artificial Intelligence at IIT Madras.
Elaborating on the findings, Nandan Sudarsanam of the Wadhwani School of Data Science and Artificial Intelligence at IIT Madras said, "Our findings show that financial cybercrime is not simply a problem of inadequate digital literacy. Even highly educated and digitally experienced individuals can become vulnerable when fraudsters exploit fear, stress and urgency. Understanding these factors is essential to designing more effective prevention strategies."
Prof. P Kandaswamy, IPS (Retd), Adjunct Faculty in the Department of Data Science and Artificial Intelligence and the Department of Management Studies at IIT Madras, said, "The response to cybercrime must move beyond blaming victims. Banks and law-enforcement agencies need stronger systems for early detection, rapid intervention and coordinated response, along with better support for victims."
(With inputs from PTI)