The coronavirus pandemic heralded a new era of digital inclusion and sparked a new momentum in digital democracy. With people forced to stay indoors, it was the technology that brought them together and kept the societal fabric intact. This also led to the emergence of new ecosystems of greater participation by different strata of the society. Cheaper phones, higher internet penetration and better connectivity infrastructure has transformed the way people make their financial transactions. Gone are the days of passbook updates and withdrawing money from ATMs.
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Even though the currency circulation has seen a massive uptick of 83 per cent since the 2016 note ban, the fact remains that more and more people are turning to digital ecosystems for various needs. Be it savings, loans, insurance, credit payments or other investment products, consumers are unlocking new alternatives for traditional financial services.
However, the surge in the digital financial market has also led to a new headache for both consumers and law-enforcing agencies. Beyond the OTT show, the Jamtara syndrome is spreading its tentacles to other tier-II cities. Latest reports suggest that Bharatpur-Mewat-Mathura have become the new epicentre for digital frauds. And current issues of cyber security are beyond phishing and hacking.
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The RBI also tried to minimise the digital frauds by introducing tokenization, the scamsters are finding new ways to dupe gullible customers. The critical aspect is that the very essence of digital democracy of financial services – allowing anyone to access anything anytime, anywhere – is becoming the very agent to siphon off the hard-earned money.
What are the key concerns in the field of financial protection?
a: Data Protection: This is the prime concern for all the consumers. It is now an established fact that the consumers are being tracked and their data is being sold to various stakeholders. This means that both data providers and those collecting data must act responsibly. A more secured network is the need for the hour. Minimal use of unverified sites, investing in constant updates of strong passwords is advised for the consumers. For the companies, it is time to invest in better digital solutions that are more secure without compromising the user experience.
b: Fool-proof security of digital transactions: More often, the cyber frauds are committed by asking an individual to make certain payments. Weak methods of authentication, no uniform standards in non-financial and financial protocols can lead to a leaky gateway causing loss to the consumer. These loopholes need to be plugged.
c: New tech and newer headaches: Yes, there’s ChatGPT, Internet of Things and rise of Artificial Intelligence. All these new advancements are helping the companies in making smoother processes and flawless connectivity. However, this is also leading to an increase in risk of breach in security. With more and more stages coming into picture that embed the user’s data, it is becoming easier for hackers to break the firewalls.