Here’s how banks plan to tackle digital financial frauds, protect customers’ money | Mint

In a concerted effort to combat the rising threat of digital financial fraud, the Department of Financial Services (DFS) has urged banks to deploy advanced technologies, including Artificial Intelligence (AI) and Machine Learning (ML), to safeguard customers and their funds.

This decision emerged during a high-level meeting led by the DFS Secretary, attended by representatives from the Reserve Bank of India (RBI), public sector, private, and payment banks. The discussions addressed the surge in digital fraud cases, particularly those involving mule accounts used to execute illegal transactions.

The DFS social media post

“Banks were directed to adopt advanced technologies, including AI/ML solutions, for real-time detection of mule accounts, training & upskilling bank staff on fraud detection & prevention, greater advocacy & awareness for the common citizen to not fall prey to the fraudsters.”

The Secretary emphasized the critical need for proactive measures to protect customers’ money, calling for the adoption of state-of-the-art tools and practices to tackle these challenges effectively.

A key recommendation was the exploration of MuleHunter.AI, an AI/ML-powered solution developed by the RBI. This tool enhances the ability to detect fraudulent activities and trace suspicious accounts, offering a potential game-changer in fraud prevention efforts.

Alongside technological advancements, banks have been tasked with strengthening their internal capabilities through staff training and upskilling in fraud detection and prevention techniques.

Raising public awareness was another focal point of the meeting. Banks were instructed to amplify efforts to educate customers about prevalent fraud tactics, urging them to remain vigilant and avoid falling victim to scams.

Collaboration between banks was highlighted as a cornerstone of the strategy. Sharing best practices and fostering inter-bank partnerships are expected to bolster the financial system’s overall resilience against fraud.

This initiative aligns with the government’s broader mission to enhance the security of the financial ecosystem and sustain public trust in digital banking. By integrating cutting-edge technologies and promoting unified efforts, the banking sector is poised to build a formidable defense against ever-evolving financial fraud schemes.