At Sign3, we have observed the increasing popularity of fintech companies in India. The digital onboarding and flows have revolutionised the financial sector, making it easier for people to access financial services from the comfort of their homes. However, with the rise of fintech companies, there has been an increase in fintech-related fraud in India.

This article aims to provide a comprehensive view of fintech and its impact on India, common fintech-related frauds in India, companies' responsibility in fraud prevention, fintech fraud prevention technology and services, and a conclusion.

Fintech is a combination of finance and technology that seeks to improve and automate financial services. Fintech services include mobile banking, online payments, loans, insurance, wealth management, and investment apps. Fintech has had a significant impact on India's financial sector, as it has made it easier for people to access financial services. India has a large unbanked population, and fintech has provided a solution to this problem.

As fintech companies continue to gain popularity in India, so do the fraudulent activities associated with them. Some of the common fintech-related frauds in India include phishing, identity theft, fake apps, and unauthorised transactions.

Phishing is a fraudulent activity that involves tricking people into disclosing their personal information, such as login credentials, or credit card details. Identity theft is a type of fraud that involves stealing someone's personal information to commit fraud. Fake apps are applications that mimic legitimate fintech apps, but they are designed to steal personal information or money from unsuspecting users. Unauthorised transactions are fraudulent activities involving the transfer of funds from a user's account without their knowledge or consent.

One of the most recent fintech-related frauds in India was the OneCard scam, where fraudsters used fake applications of celebrities like Dhoni and Kohli to obtain credit lines from OneCard. Once the fraudsters exploited those accounts, they vanished from the network. The scam was worth over $500K and involved several individuals.

Another case involved the Paytm fraud, where fraudsters used phishing techniques to trick users into disclosing their personal information. The fraudsters then used the information to transfer money from the user's Paytm accounts to their own accounts.

Fintech companies have a responsibility to prevent frauds and protect their customers' interests. Companies should implement strict security measures to protect their customers' data and assets. They should also monitor their systems and processes continuously to detect any suspicious activities. Companies should also educate their customers on the risks associated with fintech services and ways to safeguard their accounts.

Fintech fraud prevention technology involves the use of artificial intelligence (AI) and machine learning (ML) to detect and prevent fraudulent activities. Fintech companies use AI and ML algorithms to analyse customer data and detect any suspicious activities.

Data plays a vital role in preventing frauds. Signals like social data, demographic data, digital presence and user persona provide a comprehensive view of the user.

This powered by real-time monitoring and alerting at the onboarding level, which helps companies detect frauds before they cause significant damage.

In conclusion, fintech-related frauds in India are increasing, and users should be cautious when using fintech services. Fintech companies have a responsibility to prevent frauds and protect their customers' interests. Using dedicate fraud prevention providers like Sign3, fintech companies can provide safe and secure financial services to their customers.