Page 38 - Banking Finance May 2020

ARTICLE

include banks launching separate E banking services apart transactions to payment cards (debit and credit cards) and
from traditional banking services. to electronic channels like ATMs, Internet Banking and
Mobile Banking. It leads to the creation of online frauds in
Retail Lending: Recently banks have adopted customer the minds of the fraudsters. Fraudsters also follow
segmentation which has helped in customizing their product customers into this space. There is also a lack of
folios well. Thus retail lending has become a focus area .The homogeneity and transparency amongst banks on the
introduction of retail loans (home loan, personal loan) in reporting of these instances as frauds.
psbloansin59minutes.com has also enhanced the
opportunities for banks to increase their retail lending The definition of banking frauds is as follows
portfolio. "A deliberate act of omission or commission by any
person, carried out in the course of a banking
Rural area customers: Even after the Pradhan Mantri transaction or in the books of accounts maintained
Jandhan Yojna, there are many areas particularly rural which manually or under computer system in banks,
are unbanked. Banks can use the technology to extend
resulting into wrongful gain to any person for a
banking services to those areas also by the services of temporary period or otherwise, with or without
bankmitra with POS device. The banks should tap the rural
market in the years to come. any monetary loss to the bank".

In simple language, Online Banking Fraud is a fraud or theft
Offering various Channels: Banks can offer so many
committed using online technology to illegally remove
channels to access their banking and other services such as
money from a bank account and/or transfer money to an
ATM, Local branches, phone banking, mobile banking, etc.
to increase the banking business. account in a different bank. It is a form of identity theft and
is usually made possible through techniques such as phishing,
lottery fraud scam etc. Generally, the user identity is the
Other Opportunities: There are many other opportunities
customer identity number and password is provided to
in future in the field of Indian banking sector e.g. to enter
secure transactions.
new business and new markets, to improve efficiency, to
deliver high level of customer services and better risk
But due to some ignorance, silly mistakes or greed for money
management.
customer can easily fall into the trap of internet scams or
frauds done by the fraudsters. India's central bank, the
Future Prospects
Reserve Bank of India (RBI), has revealed that it discovered
Everyone today is convinced that the technology is going to
hold the key to future of banking. The achievements in the
banking today would not have make possible without IT
revolution. The adoption of technology in banks continues
at a rapid pace but the concentration is more in the metros
and urban areas. More and more programs and software
in regional languages could be introduced to cater to the
needs of people from the rural segments also.

IT Security & Fraud Risk Management
The increasing use of technology in banks has also brought
up "security" concerns. In order to avoid any mishap on this
account, banks should have in place a well-documented
security policy including information security, cyber security,
network security and internal security. Most banks in India
have migrated to core banking platforms and have moved

38 | 2020 | MAY | BANKING FINANCE