Digital frauds which erodes trust, damage economies, and fuel further fraudulent activity
FinTech BizNews Service
Mumbai, March 13, 2024: A recent report by the RBI Ombudsman Scheme (2022-2023) identifies a critical issue: a lack of robust fraud prevention mechanisms in Regulated entities (REs) is leading to a rise in unauthorized digital transactions. Ankit Ratan, Cofounder & CEO at Signzy, feels: “This has serious consequences, not just for customers who lose money, but also for the entire financial system. Financial institutions often struggle to identify and stop fraudulent transactions while complying with complex regulations. This results into rise in digital frauds which erodes trust, damage economies, and fuel further fraudulent activity.
The RBI is working hard to educate consumers about their rights, how to file complaints, and how to protect themselves from fraud. This is a vital part of the solution however, financial institutions need to implement a technology led robust fraud detection and prevention mechanism to avoid digital frauds and protect customers interest.
This is where RegTech companies can be a game-changer. They offer fraud risk management solutions that use cutting-edge technologies like real-time monitoring, adaptable rule engines, and seamless integration with existing systems. These solutions also ensure strong compliance features.
By leveraging artificial intelligence (AI) and machine learning (ML), RegTech can automate critical processes like customer due diligence (CDD), risk assessments, and transaction monitoring. This empowers financial institutions to detect suspicious activity much faster and prevent financial crimes before they happen.
In essence, the RBI report highlights the urgent need for a two-pronged approach: educating consumers and strengthening fraud prevention mechanisms within financial institutions. RegTech solutions powered by AI and ML offer a powerful way to achieve this and safeguard the financial system for everyone.”
