DoT to Provide Financial Fraud Risk Indicators to Banks
The Department of Telecommunications (DoT) has announced a significant initiative aimed at combating financial fraud in the digital payment landscape. Starting Wednesday, the DoT will share Financial Fraud Risk Indicator (FRI) data with various financial institutions, including banks, non-banking financial companies (NBFCs), and UPI service providers. This new metric classifies mobile numbers into three risk levels associated with financial fraud, utilizing an analytical tool from the Digital Intelligence Platform. Notably, PhonePe has already begun implementing this data to enhance user protection through its PhonePe Protect feature.
Understanding the Financial Fraud Risk Indicator
The FRI metrics are designed to assist financial institutions in safeguarding their customers against cyber fraud and financial crimes during digital transactions. The data is generated from an analytical tool developed on the government’s Digital Intelligence Platform (DIP). One of the primary challenges in combating financial fraud is the frequent change of phone numbers by criminals who target victims. The FRI metric addresses this issue by providing an advance indicator of the risk associated with specific phone numbers.
When a suspicious number is flagged by a stakeholder, the FRI system categorizes it into one of three risk levels: Medium, High, or Very High. This classification is based on intelligence shared by banks and financial institutions, as well as data from the Indian Cybercrime Coordination Centre’s (I4C) National Cybercrime Reporting Portal (NCRP) and the DoT’s Chakshu platform. This collaborative approach aims to enhance the overall security of digital payment systems.
Implementation Across Major UPI Providers
The DoT’s initiative will soon be integrated into three of India’s largest UPI service providers: Google Pay, PhonePe, and Paytm. PhonePe has emerged as one of the first adopters of the FRI data, implementing measures to decline digital transactions involving numbers categorized as Very High risk. Additionally, the platform is set to introduce proactive user warnings for transactions linked to Medium Risk numbers, further enhancing user safety.
Another unnamed leading UPI provider has also taken steps to bolster security by introducing transaction delays and requiring user confirmation for alerts. These measures reflect a growing commitment among financial institutions to leverage FRI data from the DIP to prevent cyber fraud effectively.
Access to Updated Mobile Number Revocation List
In conjunction with the FRI data, financial institutions and service providers will gain access to the updated Mobile Number Revocation List (MNRL). This list includes reasons for disconnection, sourced from the DoT’s Digital Intelligence Unit (DIU). The availability of this information is expected to improve the ability of financial institutions to identify and mitigate risks associated with fraudulent activities.
The DoT’s initiative represents a proactive step towards enhancing the security of digital payments in India. By sharing critical data and fostering collaboration among financial institutions, the DoT aims to create a safer environment for consumers engaging in online transactions. As the digital payment landscape continues to evolve, these measures will play a crucial role in protecting users from the growing threat of financial fraud.
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