Accounting for 55% of all fraud in India, third-party account takeover fraud represents the biggest slice of the fraud pie in India, according to a report.
In its report, fraud detection solutions provider BioCatch said every device found to participate in mule activity in India logged into an average of 35 accounts each.
Fraudsters were likely accessing Indian mule accounts from outside the country as while 86% of the first session of documented mule account activity came from within India, after a month that number fell to just 20% – and 16% of those sessions used a VPN.
It saw most mule activity (14% of the total) in Bhubaneswar; Lucknow and Navi Mumbai accounted for 3.4% of recorded mule activity, two cities in West Bengal – Bhagabatipur and Gobindapur – 1.7% and 2.6% respectively, while Mumbai accounted for 2.2%, Bengaluru 1.8%, and Cuttack 1.6% of the activity.
Emerging fraud risks
In response to a recent recommendation by the Reserve Bank of India (RBI) to abandon text-based one-time-passcodes for secure authentication, the report highlighted emerging fraud risks and prevention strategies for digital banking in India, drawing insights from a vast dataset, analyzing over 350 million sessions in December alone.
One notable finding is the rise in mule accounts in India, mirroring a global trend. The data indicates that, at one partner bank, nine out of every 10 mule accounts went undetected. The report emphasized the importance for Indian financial institutions to enhance their fraud defences, particularly against the under-the-radar trend of mule accounts.
The urgency for robust security measures is underscored in the face of evolving fraud threats. Successful detection and prevention require the adoption of advanced solutions, such as BioCatch’s next-generation financial crime detection and prevention portfolio, leveraging behavioural biometric intelligence.
The report sheds light on a combination of globally observed common threats and unique threats specific to the region. With a surge in mule activity, sophisticated fraud attacks, and scams worldwide, BioCatch urges banking and financial institutions to prioritize intelligence on criminal tactics and fraud arsenals.
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