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Indian Financial Industry Facing Rising Online Fraud

As per the KPMG India Fraud Survey 2008 Report, India has witnessed a significant increase in the proportion of phishing activities and online fraud.

The report also disclosed that over 80% of the respondents acknowledged online fraud as a problem and nearly 70% believe that it will surge in coming two years (by 2010).

According to the security experts, with increasing penetration of Internet, cyber criminals can access data easily. It has also enabled fraudsters to expand their operations beyond national borders. Techies generally work as anonymous freelancers and hack into IT systems or create malicious virus, trojans and phishing scams to steal personal information.

On the other side, phishers and scammers get access to data through corrupt individuals in the targeted organization. Once the data is acquired, phishers begin their operations of identity theft and phishing at the local level in different countries.

According to the report, identity theft and phishing are continuously rising and authorities fail to reach the roots of the problem. Hence, the responsibilities of curbing this menace rest upon those who suffer from it - the financial sector - to stop the problem at the execution point and safeguarding the account throughout its lifecycle.

Security experts further revealed that majority of financial frauds in India are soft frauds wherein credit seekers manipulate application data to become eligible for the credit. But there are signs of entry of career criminals who have shown interest due to low risk of prosecution and high rewards.

Security experts added that financial fraud cannot be competed with and the industry has to work together to tackle it. Critical initiatives are required, such as the Indian Banks' Association has taken to try and increase data sharing. These initiatives will help targeted organizations to understand possible attack patterns and links to stop fraudulent applications, breached data assets and compromised accounts.

Moreover, fraud awareness should be raised which will help in ensuring up-to-date information about the latest fraud trends and developments to organizations engaged in preventing frauds. As a result, these organizations would be better prepared to fight with the global problem.

Related article: Indian Banking Sector in the Phishing Net

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