Mind-Blowing Facts From Digital Banking Frauds Report: 55% Scams In India Are 3rd-party Account Takeover

In a report released by BioCatch, the global digital fraud detection platform, it was revealed that account takeover represents more than half of all fraud cases for its customers in India. The findings come on the heels of a recommendation by the Reserve Bank of India (RBI) that financial institutions in that country abandon text-based one-time passcodes as a method of secure authentication.

BioCatch’s 2024 Digital Banking Fraud Trends in India report – the company’s first ever focusing solely on any one nation – offers an in-depth look at the latest fraud risks and prevention strategies for banks in the country as they rapidly employ digital transformation strategies.

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The report’s findings pull from a store of BioCatch data, analysing more than 350 million sessions in December alone.

The report also noted a concerning bump in mule accounts in India, in line with what BioCatch data shows as a growing global threat. At one partner bank in the country, BioCatch found nine out of every 10 mule accounts went undetected.

“The prevalence of mule accounts potentially represents the most under-the-radar trend in the entire fraud space,” BioCatch director of global fraud intelligence Tom Peacock said.

“The mule accounts banks succeed in identifying almost certainly represent just the tip of the iceberg. Indian financial institutions must employ more robust security measures to both detect and then shut down these sprawling mule networks.”

Key India Report Findings:

• Account takeover attacks still dominate: Accounting for 55% of all fraud in India, third-party account takeover fraud still represents a bigger slice of the fraud pie than the social engineering scams BioCatch sees exploding elsewhere on the planet.
• Mules a massively underreported plague: Every device found to participate in mule activity in India logged into an average of 35 accounts each.
• Fraudsters likely accessing Indian mule accounts from outside the country: 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.
• BioCatch customers saw more mule activity (14% of the total) in Bhubaneswar than anywhere else in the country: 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, Mumbai 2.2%, Bengaluru 1.8%, and Cuttack 1.6%.

BioCatch’s report underscored the urgency with which Indian banks must bolster their fraud defences. Financial institutions in the region that are successfully detecting and preventing an ever-evolving array of threats have adopted integrated advanced solutions.