Companies like digital identity verification services provider IDfy, digital signature services company EMudhra and Signzy, which offer online identity verification, are advocating fraud detection
Tech start-ups that offer regulatory services to financial institutions welcomed the Reserve Bank of India (RBI) move to caution the public against frauds under the garb of know your customer (KYC) updation. Companies like digital identity verification services provider IDfy, digital signature services company EMudhra and Signzy, which offers online identity verification, are advocating fraud detection.
As more fintechs emerge to power digital India and small businesses embrace the internet and digital mediums to expand their reach, there will be heightened cybersecurity concerns. Therefore, fraud detection and prevention services will be in demand for fintechs going ahead.
The RBI’s caution assumes significance in the backdrop of rising instances of bank fraud in the country in recent years. Frauds reported by banks declined to a six-year low during 2022-23, while the average amount involved in frauds was the lowest in a decade, according to the report on the trend and progress of banking in India released by the Reserve Bank of India on December 27.
Ankit Ratan, CEO and Co-founder, Signzy said that businesses especially those in the BFSI sector, should adopt the risk-based approach introduced by the RBI. “Customers are strongly advised to initiate KYC requests through official channels, refrain from sharing sensitive information with anyone, and promptly report any instances of cyber fraud to their respective banks or financial institutions. To stay ahead of evolving modus operandi, businesses, especially those in the BFSI sector, should adopt the risk-based approach introduced by the RBI.
This involves striking a balance between regulatory compliance and customer convenience. Digital KYC and onboarding solutions play a crucial role in ensuring businesses possess sufficient customer information, thereby preventing money laundering and other financial crimes