Is RBI's digital payments intelligence platform future of secure transactions?

In todayrsquos fastgrowing world everything comes to your doorstep with just a tap of a button on your digital device Need to check your bank balance or make a quick payment to your friend or business client Your bank is at your service with a single tap Craving for your favourite dish on a weekend Your food order is at your doorstep with one swipe Planning to go on a trip with your friends or family to your favourite destination Fret not your ride is a few seconds away with just a booking All these services are now available with just a click on your digital device Thanks to digitisation for making the impossible into a happening realityUpsides and downsides of digitisationAs per the National Informatics Centre records the UPI transactions in India have increased from Rs 67 billion in 2015 to Rs 8375 billion in 2023 These stats demonstrate a healthy spike in UPI users in India resulting in bridging the digital divide Unarguably for almost a decade now 20152023 India witnessed a sea change in the way people transact and operate money across bordersFrom the emergence of the Digital India mission on July 1 2015 to date the financial contribution and support from the local and central government has been substantially thumping The spike in smartphone users and affordable internet led to the acceleration of digital adoption in India resulting in lessening the gap between the government and the public aiming to transform lives and making things easily accessible like never beforePeople understood the power of digitisation during the Covid19 pandemic The entire world was hit by a deleterious wave where people grappled in pain to save lives During such unprecedented conditions where lockdowns were a stern norm in place digitisation came to the rescue giving people a beacon of hope and enabling remote work and online operations as the new normal while simultaneously keeping everyone connectedYet as they say every coin has two sides so does digitisation too On one hand the Indian government is working hard to strengthen the core foundation of the digital infrastructure but on the other hand online frauds are snowballing at a faster rate Although digitisation made lives a living haven this easepeasy payment mode opened the doors to scams and frauds causing risk of safety for peoplersquos hardearned savingsIf you are oblivious to the kinds of online scams here are a few that you must know to protect yourself from online attacks from grifters1 Phishing People receive several banking and financial updates from banks and other financial institutions regularly But what is the integrity of those messages Are all the messages coming from the same financial channel In this busy world identifying the trueness of every text or link from banks or financial institutions can be tedious Fraudsters take this situation as an advantage they send you similar banking messages with fake links They dont seem unreal but when you click them theyll take you to fake landing pages asking you to fill in your personal banking and financial information to proceed with your process request This hitherto unknown activity could lead to the risk of losing all your money in a flash2 QR code fraud Digital payments in India have skyrocketed in leaps and bounds reaching 131 billion UPI transactions in FY24 alone according to the Finance Minister of India Despite the smooth digital payment channels the fraudsters still made their way into the digital accounts of the customers via UPI QR codes Since itrsquos not easy to identify the credibility of a QR code these fraudsters capitalize on this weakness and use it to siphon all your savings with just a simple QR code scan As per the latest RBI reports the UPI frauds rose from 9046 in 202223 to 36075 in 20232024 To be on the safer side donrsquot scan any obscure QR codes that come on your emails or social media handles though they create any urgency in the name of social aid medical emergency or donations etc People end up as prey to fraud due to a lack of financial literacy and knowhow Yet RBI is driving campaigns to edify peoplesrsquo financial literacy and keep them informed about financial fraud3 UPI fraud There are millions of ads that run online every day and not every ad is directed to make a sale out of your click Some are fake ads too that look very attractive mimicking your favourite brand and propel you to click and check out their products Thatrsquos when you get caught in the net of swindlers and fraudsters These fake portals will coax you into buying a product that never existed in the first place And the next moment after the sale you see all your money from your account getting deducted in multiples 4 Fake OTPs One Time Password or OTP is one of the many ways to secure digital transactions But woefully if you look at the digital fraud stats ldquoFake OTP Fraudrdquo stands as the most common technique by fraudsters to carry out online scams Those who are novel to the online world get easily trapped by these parlour tricks OTP fraud can happen in several ways like executing an OTP request via call or email or SMS fake software links mobile hacks etcImmediate need for improved digital securityDigitisation became the heart and soul of the financial system Not only was it empowered to push the spending limits of the people but also unlocked solutions for myriad financial hurdles The digital payment landscape has revolutionized the way financial transactions happen in the market However the accelerating growth in digital adoption has left some loose gaps in the financial space Even the pandemic has pushed financial enterprises to bring about swift immediate solutions amid the crisis via a shortcut route This leniency in digital security led to soaring frauds and scams such as phishing malware attacks fake OTP frauds and UPI fraudsIn a thriving world weaker digital security can obstruct the free flow of payments leading to radical destruction in diverse sectors and the economy at large Since the payment players are in multiples the competition and pressure to capture big markets particularly like India is unquestionably real When it comes to personal and financial data people expect ldquoutmost securityrdquo and in this digital world this is utterly impossible but can be attainable through stern regulations and government supportAccording to an official press release digital payments stand at 11660 crore in terms of volume as of December 2023 This considerable number explains the progress in the digital payment systems in India Now where do we stand in terms of security in the digital payment landscape is a big question that needs to be addressed by the payment aggregators and other digital payment managing authorities like RBI and NPCI As per the latest records it was found that Aadharenabled digital payments accounted for 1137 of financial frauds in 2023 Besides the evolution of Artificial Intelligence AI has created a positive buzz in the world which will soon likely take over major banking operations serving as a onestop solution for all personalised banking services with just a tap However this inimitable technology has also brought in knocking additional threats to the financial system While digital platforms are embracing AIrsquos dominance simplifying financial channels this technology has trapped several banks posing new risks to customersrsquo fundsA Rs 820crore UCO bank scam that happened in May 2024 is a classic case that explains the frail digital security in India The UCO bank received deposits from 14600 bank accounts of seven private banks via IMPS inward transactions to 41000 UCO bank accounts without any debits from their accounts accounting to 820 crore Yet later it was made clear that these wrongful transactions happened due to the bankrsquos technical glitchAs we live in this current digital era where money travels borders faster than light customers expect robust security for their funds RBI has been educating the bankers and the public by conducting seminars workshops conferences and campaigns Caseinpoint ldquoRBI Kehta HaihellipJaankar Baniye Satark Rahiyerdquo one of the awareness campaigns by the Reserve Bank of India educates the masses on cyber frauds and various financial and banking regulations via TV commercials digital ads etcThe Digital Personal Data Protection Bill DPDP is another key initiative by the central government of India to boost the digital security levels of online transactions The aim of the actbill is to protect the personal data of the customers processing their financial payments online The bill drafted a set of guidelines that need to be followed by any party upon data collection As per the bill if any data gets shared without the consent of the respective individual is considered a felony To narrow the cyber attacks the RBI further came up with a new ldquoDigital Payments Intelligence Platformrdquo to give a strapping push to digital payments and uplift customers overall trust in banking So what does this platform have to offer to the public How does it workRBIrsquos new digital payments intelligence platform combats digital fraudIn the course of time the Reserve Bank of India RBI has proposed and incorporated several measures and stern regulations to cut down the cyber attacks in the realm of digital payments To take digital security to the next level the RBI introduced the Digital Payments Intelligence Platform a way to enhance the strength of digital payments in India This platform is headed and chaired by Shri AP Hota former MD amp CEO of NPCIAccording to the RBI reports over the six months till the end of March 2024 the domestic payment frauds escalated by 706437 to Rs Rs 2604 crore against Rs 1526 crore in the corresponding period last year The volume of online scams surged substantially over the six months till the end of March 2024 to 1551 lakh as opposed to 115 lakh in the same timeframe in the previous year India has been witnessing this considerable spike in fraud rates since UPI adoption in 2016 due to a lack of proper security integrations into the banking systems and other alterations in the digital landscapeOver the last two years the UPI payments reached Rs 200lakh crores resulting in a 13737 spike in cashless transactions As India already embraced UPI as a part of their financial system therersquos a high need for a secured platform that protects hardearned deposits and savings of the public The accelerating cyber frauds should be alleviated through a systemwide approach says the RBI Governor Shaktikanta Das hence the establishment of this new platform for networklevel intelligence and realtime data sharing throughout the digital realmTo curtail digital fraud RBI raised the single rupee term deposit limit from 2 Crore to 3 Crore for commercial banks and a single rupee term deposit of 1 Crore and above for Regional Rural Banks Furthermore the RBI also incorporated an emandate autoreplenishment facility for online transactions between customers and merchants This allows customers to have control over their online payments and keeps them aware of their financial transactionsHow RBIrsquos digital payments intelligence platform benefits customers and financial entitiesRBI has been on a roll proposing myriad regulatory measures to bolster the digital payment landscape The aim of RBIrsquos digital payments intelligence platform is to be a security bridge between customers banks and financial and nonfinancial entities However the big question here is how this new platform is going to benefit financial organisations stakeholders and customers1 Heightened security The prime focus for any financial entity whether online or offline should be security and convenience Meeting these two basic aspects should be every financial entityrsquos foremost job on their daily checklist The surge in UPI payments and significant growth in the usage of digital wallets exhibits the reality of future digital adoption As India is moving towards a cashless economy having stern regulations and heightened digital security is pivotal RBIrsquos Digital Payments Intelligence Platform offers just that and more to both financial organisations and customers 2 Detects frauds swiftly Cyber frauds have been skyrocketing for a very long time now however financial entities can use RBIrsquos intelligence platform as leverage to track and monitor digital frauds and address them swiftly3 Regulatory adherence The platform will act as a fact checker to banks and payment aggregators ensuring that all the transactions are happening smoothly with regulatory checks 4 Automation and efficiency The evolution of Artificial Intelligence AI has transformed the digital landscape and the way people transact online However despite having the automation process in place human intervention is important to ensure the accuracy of financial transactions RBIrsquos new platform gets the job done by doing manual checks and realtime monitoring of all financial transactions to spot and curtail fraudulent activities online5 Boosts transparency and trust Unarguably the digital space is a bit scary to operate and transact Though the digital walls are protected with robust infrastructure with a further push by AI reducing queuing time at the end of the day customers look out for transparency which subsequently leads to boosting trust RBIrsquos new platform aids both financial entities and customers in achieving such an experience Future of secure digital transactionsUPI isnrsquot just about digital payments but therersquos more than what meets the eye For instance credit card usage has been snowballing to Rs 1826 trillion in FY24 resulting in a 2737 growth in customer spending via this facility The launch of RuPay Credit Card on UPI by NPCI was a game changer in 2023 Customers can simply integrate their RuPay credit card to any UPI app and make instantaneous payments via a simple QR code scan To make any payment to the merchant all you need to do is simply connect the credit card to the UPI app scan the merchant QR code add the amount in figures select RuPay Credit Card as a mode of payment enter the UPI pin and make the final payment Digital Payment apps like Pay Later Zest Money PostPe and a few others are expanding their reach going beyond local cities and capturing the bigger marketsDigital wallets have garnered substantial popularity making UPI apps like Google Pay PhonePe and Paytm the future of digital transactions Moreover the introduction of UPI Lite has simplified smallvalue transactions Say you want to send Rs 500 to your friend or a colleague you can simply pay without the UPI pin However the max cap limit for UPI Lite is Rs 4000 day and the max balance one can hold in the UPI Lite wallet is Rs 2000 only Such transitions in the digital space make peoplesrsquo lives easier and more flexibleFurthermore the integration of Blockchain Technology in the digital space can upgrade the security levels for digital payments This technology runs through a decentralised system however ensures transparency for all the crossborder digital payments The emergence of tokenization in the blockchain realm also aids in fighting cyber fraud This deployment converts the sensitive data into tokens making it easily tradable with enhanced security without the fret of data loss for the people Even authorities like SEBI and RBI welcomed this new tool since the inclusion of digitization into the fintech spaceDespite an affirmative overview RBI the powerhouse of all the banks in India should unlock the full potential of various AI and Blockchain tools and synergize and integrate them into the system to witness exponential growth in digital payments Apart from that the government should take the initiative to conduct campaigns and events that educate the public on cyber fraud and available resources to secure their financial health