New tool against online fraud: Alerts for UPI, card, and net banking

Feature involves sending an immediate alert to the account holder before allowing any unusual or suspicious transaction initiated through their bank account

Banks are implementing a safety feature called ‘transaction confirmation’ to prevent unauthorised transactions, according to a report by the Economic Times (ET).

It sends an immediate alert to a person if there is any unusual or suspicious transaction initiated through their bank account. Upon receiving this alert, the account holder can either consent to or decline the transaction.

ET reported that ICICI Bank, HDFC Bank, and Standard Chartered Bank have already implemented the fraud prevention measure. Other banks have also adopted similar systems to prevent fraudulent transactions.

The fraud prevention feature works by building a credit intelligence system that identifies suspicious transactions, which differ from usual transactions, and sends an immediate alert to the account holder. The transaction is not allowed unless the account holder confirms its authenticity.

 

Manish Agrawal, executive vice-president of the credit intelligence and control department at HDFC Bank, told ET the bank has implemented a monitoring framework across all channels, including UPI, Net banking/mobile banking, and credit and debit cards, to safeguard customers against potential frauds.

Another example from ICICI Bank involves a UPI transaction alert. When the bank could not reach a customer to confirm a UPI payment transaction of Rs 30,000, it sent an SMS instructing the customer to call specific numbers to raise a dispute or unblock the transaction.

Standard Chartered Bank has employed fraud risk management tools with detection and prevention capabilities to mitigate online and card fraud risks. Citing a spokesperson for the bank, the report said that these capabilities monitor suspicious activities by analysing data such as device, location, internet connectivity, merchant type, transaction velocity, and value.

The bank has implemented controls at each stage of transactions, such as login, beneficiary addition, and transaction initiation, in addition to monitoring transactions to safeguard customer accounts.

The transaction confirmation feature is very selective as it is not activated for all transactions initiated through your bank account across different channels-UPI, credit card, debit card, etc.

Pradeep Janardanan, director of Standard Chartered GBS (Global Business Services), said geolocation refers to determining the physical location of a device or user based on their internet connection or mobile network. By comparing the location of a transaction with the customer's usual location, banks can identify suspicious activities.

Janardanan also shared insights into how banks use the internet protocol (IP) address of their customers to prevent fraud. He explained that IP controls involve monitoring the IP address from which a transaction is initiated. Banks maintain a database of known fraudulent IP addresses and compare them with the IP addresses of incoming transactions. If a suspicious IP address is detected, the transaction may be flagged for further investigation or verification.