Account takeovers, mule accounts main reason for financial institution frauds in India

Account takeovers characterize greater than half of all banking fraud instances in India, with third-party account takeovers accounting for round 55 per cent frauds, a lot greater than social engineering scams that are the main reason for fraud in another international locations.

Additional, there was a regarding bump in mule accounts in India, in step with the rising world risk, as per a report by world digital fraud detection firm BioCatch, which makes use of behavioral biometric intelligence. Nonetheless, what’s extra regarding is that the majority of those accounts go unreported.

“The prevalence of mule accounts probably represents probably the most under-the-radar pattern in the whole fraud house,” BioCatch Director of World Fraud Intelligence Tom Peacock mentioned.

‘Tip of the iceberg’

The report on Digital Banking Fraud Tendencies in India, the corporate’s first-ever report on a single nation, analysed greater than 35 crore periods in December 2023 alone. It added that at one companion financial institution, 9 out of each ten mule accounts went undetected, and each machine discovered to take part in mule exercise throughout banks logged into a mean of 35 accounts every.

“The mule accounts banks reach figuring out virtually definitely characterize simply the tip of the iceberg. Indian monetary establishments should make use of extra strong safety measures to each detect after which shut down these sprawling mule networks,” Peacock mentioned. 

Additional, most of those mule accounts are being accessed from exterior India. Whereas 86 per cent of the primary session of documented mule account exercise got here from inside India, after a month that quantity fell to twenty per cent, of which 16 per cent used a VPN.

Most mule exercise at 14 per cent of the entire, was seen in Bhubaneswar adopted by Lucknow and Navi Mumbai for 3.4 per cent every. Mumbai was 2.2 per cent, Bengaluru at 1.8 per cent, and Cuttack at 1.6 per cent.

The report highlighted the urgency with which Indian banks must bolster their fraud defenses.

“The fraud threats are a mixture of each widespread threats seen globally and distinctive threats we discover solely on this area,” BioCatch’s APAC Vice President of Gross sales Richard Sales space mentioned. “Our India report offers much-needed intel, and hopefully spurs these banks to quickly undertake superior defenses to remain forward of a ceaselessly innovating group of fraudsters and criminals working domestically and across the globe.”