Implementing robust regulatory frameworks, enhancing cybersecurity measures, and promoting consumer awareness and financial literacy is necessary to mitigate the risks associated with digitalization and protect consumers from exploitation and fraud, stated Swaminathan J, Deputy Governor, Reserve Bank of India in a latest speech.
He noted that in India, regulated entities are required to implement multi-factor authentication for all payments through electronic modes and fund transfers, except for some explicitly exempted small value transactions. At least one of the authentication methodologies should be generally dynamic or non-replicable such as one-time password, mobile device binding, biometric, etc. Regulated entities are required to put in place security controls for internet banking, mobile payments application and card payments security.
Swaminathan said that Regulated Entities are also required to conduct risk assessment of the safety of digital payment products as well as suitability and appropriateness of the same vis-a-vis the target users, both prior to establishing the service and regularly thereafter. Further, they are required to have systems to identify suspicious transaction behaviour and mechanisms in place to alert customers of the same.
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