How technology is bridging security concerns for credit card and digital lending companies in India

Technology has simplified our lives to a great extent. Gone are the days when one had to physically stand in long queues to make bill payments, book tickets or transfer money. Aided by massive smartphone penetration, affordable high-speed internet and a variety of digital payment options, the e-commerce industry in India is booming like never before. A significant factor behind this massive digital revolution in the country can be attributed to the role of fintech companies in financial inclusion by streamlining traditionally time-consuming processes using the power of technology.

Fintech companies offer various services, including online payments, instant credit, Buy Now Pay Later (BNPL), robo-advisory, insurance, investments and much more. Consumers prefer fintech companies mainly due to the speed, privacy, convenience, ease of use and multichannel accessibility they offer without human interaction. Thanks to fintech, tasks like taking a loan or a mortgage that required several days or weeks in the past can be completed in just a few minutes from the comfort of one’s home.

While India’s digital boom has empowered consumers in terms of convenience on one side, there are some unfortunate pitfalls too.

A few months back, a leading Bollywood actor tweeted about how his PAN was misused online to avail of a loan in his name without his knowledge. There have been a few other instances where unscrupulous elements have misused information to open new fake accounts for misappropriation. Most common digital scams in India include phishing, identity theft, spoofing, transaction fraud and account fraud. Hence, users must exercise basic caution like verifying the authenticity of websites or apps and sharing ID proofs only where it is essential.

While technology is making life better for fintech customers day by day, scamsters, too, are constantly innovating to find new ways to con people. With rising frauds, the onus of preventing scams while securing the interests of genuine customers lies more with organizations rather than the consumers.

To improve the overall experience of genuine customers without compromising on security, domestic fintech companies have introduced a series of measures. Some of the latest security measures include multi-factor authentication, the issue of virtual cards that generate new card numbers for every transaction, AI-based facial recognition and machine learning-based fraud detection solutions to analyze irregular transactions and user behaviors on a real- time basis.

Some companies also use cutting-edge technologies such as unsupervised learning or Deep Learning machine models, which continuously and automatically learn from fraud instances without retraining.

To stay ahead of threats in the fight against fraudsters, select new-age digital lending companies are turning to advanced technologies such as proprietary unique device detection systems that work in the background without impacting user privacy, and behavioral fraud detection, which checks how an applicant is moving through the workflow. Besides these, some fintech companies use open-source grid-based mapping solutions to detect sudden transaction spikes from certain areas and help identify common fraud patterns. Going a step further ahead of AI-based facial recognition, some organizations also use advanced technology to check the applicant’s ID proof photo with their existing user database to eliminate potential frauds and safeguard the interests of genuine customers.

Bottom line: Effective use of technology boosts customer delight while keeping fraudsters at bay

Detection and prevention of online fraud is a constant process. A lengthy and complicated process using multiple customer data points for availing credit can result in potential customers, especially the genuine ones dropping out mid-way.

With the heavy lifting done by technology, availing of instant online credit is a breeze for genuine customers. Eliminating additional checks for customers by harnessing the power of cutting-edge technologies reduces inconvenience to applicants and ensures a wow experience. At the same time, it guarantees the detection and prevention of fraud in real-time.

Privacy, convenience and security of information are top concerns for most consumers. Technology helps to uncomplicate things. With advanced technologies, new-age digital lending companies are consistently raising the bar regarding privacy, convenience and security for legitimate customers. As a result, while fraudsters face multiple barriers, things have become more accessible for genuine customers.



Views expressed above are the author’s own.


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