Banks are facing challenges around fraud prevention and data security as digital transactions are on the rise.
Indians have embraced digital transactions in a big way and are rapidly switching to convenient ways of non-cash payment methods.
Following demonetization in November 2016, there has been an increase in adoption of digital instruments, with merchants – right from the one who sells groceries to the one running a high-end store in a Mall-- accepting cards and other convenient ways of making payment. Online payments through Unified Payments Interface (UPI) has also facilitated transfer of money between different back accounts instantly.
Even as we witness this amazing shift in digital transactions in India, consumers are yet to learn the dos and dont's of sharing personal information and exercise caution in protecting their data and account privacy.
A survey conducted by financial services technology company, FIS, has revealed that 96 percent of Indian customers were victimised by fraud last year. The report says that adoption of apps by one’s financial institution has gone up by 83 percent.
The FIS’ annual Performance Against Consumer Expectations (PACE) report, covering a survey of 1055 respondents across the country, revealed that consumers becoming victims of financial frauds had doubled to 37 percent year on year.
Banks are facing challenges around fraud prevention and data security as digital transactions are on the rise. The survey further revealed that 28 percent of young generation in the age group of 18 to 26 and 35 percent of other customers who are 53+ are unsatisfied with the banks.
“With surge in digital channels such as smart phones/tablets and wearable devices, mobile apps have been driving engagement and innovation,” says Ramaswamy Venkatachalam, Managing Director – India, FIS.
“India is leading many countries (USA/UK/Germany) with a wide margin when it comes to adoption of mobile-based payment solutions. However, IMPS and UPI have undergone a lot of transition in the last 12 months,” he adds.
According to Venkatachalam, more than 800 million transactions a month are processed today through UPI. “UPI didn’t exist 18 months ago. Non-bank players are handling huge transactions. Going by these growth and trends. Digital is here to stay,” he says, adding, ‘however, banks must invest in better fraud detection systems.”
“Since banking is a business of trust, investing in the right partner is more important,” he opines.
Talking about the fast-paced technology adoption by financial institutions, he says, “Technology for technology’s sake is a dead end. But when applied correctly in use cases, it could be invaluable.”
Banks have moved away from doing everything at the branch. Data is becoming smarter because they are integrated from different sources. They must adopt some of the technology tools available to be on par with the others.
There are many non-financial companies that are leading the way and showing the path that it is possible. “Technology adoption with right use cases will give you immense value,” he adds.
