New tool against online fraud: Alerts for UPI, card, and net banking.
Enhancing Bank Security: Transaction Confirmation and Fraud Prevention Measures.
According to a report from the Economic Times (ET), banks are rolling out a security measure called 'transaction confirmation' to thwart unauthorized transactions. This feature promptly notifies an individual of any irregular or questionable transaction made through their bank account. Upon receiving such an alert, the account holder can either authorize or reject the transaction. ICICI Bank, HDFC Bank, and Standard Chartered Bank have already implemented this measure to combat fraud, with other banks following suit.
The fraud prevention mechanism operates by deploying a credit intelligence system that pinpoints suspicious transactions, distinct from typical ones, and promptly alerts the account holder. The transaction remains pending until the account holder confirms its legitimacy. Manish Agrawal, executive vice-president of HDFC Bank's credit intelligence and control department, informed ET that the bank has instituted a monitoring framework covering all channels like UPI, Net banking/mobile banking, and credit and debit cards to shield customers from potential scams.
In another instance at ICICI Bank, if a customer cannot be reached to confirm a UPI payment transaction of Rs 30,000, the bank dispatches an SMS instructing the customer to call specified numbers to either dispute or unblock the transaction.
Standard Chartered Bank has adopted fraud risk management tools with detection and prevention capabilities to mitigate online and card fraud risks. According to a bank spokesperson cited in the report, these tools monitor suspicious activities by scrutinizing various data points such as device, location, internet connectivity, merchant type, transaction velocity, and value. Controls are implemented at every transaction stage, including login, beneficiary addition, and transaction initiation, in addition to continuous transaction monitoring to safeguard customer accounts.
The transaction confirmation feature is selective, as it is not activated for all transactions conducted through the bank account across various channels such as UPI, credit card, and debit card.
Pradeep Janardanan, director of Standard Chartered GBS (Global Business Services), explained that geolocation involves determining the physical location of a device or user based on their internet connection or mobile network. By comparing the transaction location with the customer's usual location, banks can identify suspicious activities. Janardanan also shed light on how banks utilize customers' internet protocol (IP) addresses to prevent fraud. He elaborated that IP controls entail monitoring the IP address from which a transaction originates. Banks maintain a database of known fraudulent IP addresses and cross-check them with incoming transaction IP addresses. If a suspicious IP address is detected, the transaction may be flagged for further scrutiny or verification.
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