Page 29 - Banking Finance December 2024

ARTICLE

that halted operations for hours, resulting in financial skimming continue to be a problem, especially in
losses and a ruined reputation. metropolitan areas like Mumbai, Delhi, and Bengaluru.
3. Vishing and SMShing: Mobile Banking Fraud: The use of mobile banking has
A growing trend in India is "vishing" (voice phishing) and increased by 60% in India over the last two years. However,
"SMShing" (SMS phishing), where fraudsters use phone this has also led to a significant rise in mobile banking fraud,
calls or text messages to trick victims into divulging which saw a 40% jump in 2023. Fraudsters are increasingly
sensitive banking information. According to industry targeting mobile users with malware-laden apps or fake
data, vishing and SMShing attacks increased by 23% in banking apps designed to steal user credentials.
2023, particularly during holiday periods when bank Fraud in UPI Transactions: UPI transactions, which reached
fraud attempts are more common. over Rs. 10 trillion in 2023, have become a key target for
4. Mobile Banking Fraud: cybercriminals. According to the National Payments
As mobile banking apps become more widespread, Corporation of India (NPCI), fraudulent UPI transactions
cybercriminals have shifted their focus to exploiting increased by 17% in 2023, with over 25,000 cases reported
vulnerabilities in these platforms. Mobile malware across the country.
attacks have risen sharply, with many users unknowingly
downloading malicious apps that steal banking Impact of Cyber Crimes on Indian Banks
information. In 2023, there was a 50% increase in Cybercrimes have far-reaching consequences for both banks
mobile banking-related fraud in India. and their customers. The most obvious impact is financial,
5. Card Cloning and Skimming: as banks bear the cost of compensating victims, restoring
Despite the rise in digital banking, physical methods of systems, and strengthening cybersecurity measures.
cybercrime, such as ATM skimming, remain rampant. According to industry estimates, Indian banks lost nearly Rs.
Criminals install skimming devices on ATMs or POS (point 12,000 crore in 2023 due to cyber-related frauds.
of sale) systems to steal card information. In 2022, the
In addition to direct financial losses, cybercrimes also tarnish
RBI reported over 8,000 cases of card skimming in
India, accounting for losses totaling Rs. 140 crores. a bank's reputation. Trust is one of the most critical assets
in the banking sector, and a major cyber breach can cause
6. Business Email Compromise (BEC): significant reputational damage. Customers may lose faith
BEC attacks involve cybercriminals impersonating high-
level executives or trusted business partners to deceive
companies into transferring funds. While this type of
fraud is more common in corporate banking, Indian
banks have seen an uptick in these incidents, with losses
surpassing Rs. 3,000 crore in 2023.

Recent Data on Cyber Crimes in Indian

Banking
The rise of cybercrime in Indian banking is staggering. The
RBI's 2023 report on frauds in Indian banks revealed a sharp
increase in the number and scale of cybercrimes:
Cyber Frauds in Digital Payments: Digital payment frauds
have increased by over 35% from 2022 to 2023, largely
driven by phishing attacks and unauthorized transactions.
Frauds Involving ATMs and Cards: Despite the rise of
cashless payments, ATM frauds remain persistent. In 2023,
more than 9,500 ATM-related fraud cases were reported,
leading to losses exceeding Rs. 120 crore. Card cloning and

26 | 2024 | DECEMBER | BANKING FINANCE