Telcos and Banks: The First Line of Defense Against Digital Arrests

The issue of digital arrests underscores the need for both awareness and systemic improvements. While victims are often blamed for carelessness, the responsibility also lies in empowering citizens through awareness campaigns to avoid falling victim to scammers. 

Additionally, addressing investigative loopholes is crucial for resolving the problem. However, to truly combat digital arrests, the roles and responsibilities of key stakeholders—especially telecommunication companies and banks—must be evaluated and addressed.

In response to the rise in online fraud, banks are advising customers to remain vigilant and refrain from sharing sensitive details, such as KYC information, user IDs, passwords, card details, CVV, OTPs, or PINs. Along with these warnings, banks are providing tips to help customers protect themselves from emerging threats, emphasizing the need for proactive security measures.

Tackling digital fraud requires systemic reforms from both telecommunication companies and banks. While telcos like Airtel have systems to identify spam calls, they lack similar mechanisms to prevent fraud, raising concerns about the SIM card issuance process and the absence of a system to flag suspicious numbers. 

Collaborative efforts among telcos to crowdsource and dynamically update suspect number databases, along with whitelisting government numbers and enforcing strict compliance, are essential.

For banks, the creation of mule accounts exposes flaws in the KYC process. A thorough KYC audit, along with biometric-based verification, can help mitigate these risks. Banks must be held accountable, as fraudulent activities often exploit weaknesses in their systems. Strengthening oversight and accountability in both sectors is critical for effectively combating digital fraud.

Going forward, integrating business logic into core banking systems can reduce money transfers to mule accounts by flagging suspicious beneficiary additions. AI can help identify patterns and connections, providing early detection of fraud and enabling proactive action. This combination of smart banking and AI can significantly combat digital fraud.

Ms. S Mohini Ratna - Editor VARINDIA