Behavioral Analysis for Fraud Detection
Context: RBI Governor Shakti Kanta Das emphasized the importance of using technology and behavioral analysis to detect anomalies in consumer behavior and prevent fraud. This includes monitoring transactions during odd hours, transactions deviating from usual patterns, and unauthorized beneficiary additions.
Relevance: GS 3 (Security, Cyber Security)
While technology can be beneficial, there are risks associated with its utilization without appropriate safeguards. This includes compromising customer data, invasion of privacy, and subtle manipulations based on consumer profiling.
Need for Safeguards
Mr. Das emphasized the necessity of implementing appropriate safeguards when utilizing technology for consumer behavior analysis to mitigate potential risks.
Utilization of Artificial Intelligence
AI capabilities are being used to enhance customer service through personalized interactions, chatbots, and virtual assistants tailored to specific products. However, its deployment in fraud in fraud prevention, identification verification, vulnerability mitigation, and protection is still in the nascent stages.
Integrated ombudsman scheme
Mr. Das discussed the integrated ombudsman scheme, which entrusts the ombudsman with upholding the trust of ordinary citizens. The Ombudsman is expected to provide an independent avenue for unresolved grievances and facilitate the redress of customers’ complaints.
Improvements in the Ombudsman Framework
There have been significant improvements in the implementation of the integrated Ombudsman framework of the Reserve Bank, aiming to enhance grievance redressal processes.
Financial services, such as banks, investment companies, and insurance firms, play a pivotal role in the global economy by providing vital services like lending and investment options. With the advent of digital banking and online platforms, the need for robust cybersecurity measures in this sector has escalated to safeguard sensitive information and financial assets
Significance of Cybersecurity in Financial Services
Addressing cybersecurity in financial services demands a holistic strategy that merges technology, regulatory adherence, and educational initiatives to combat the ever-evolving landscape of cyber threats.
Cybersecurity is crucial in financial services to protect sensitive information, mitigate financial losses, uphold customer confidence, and adhere to regulatory standards.
Key threats include phishing and social engineering, malware and ransomware, DDoS attacks, internal threats, and API security flaws.
Measures include web application firewalls (WAF), DDoS defense, anti-fraud measures, identity and access management (IAM), advanced threat defense, vulnerability assessment and penetration testing (VAPT), security education programs, monitoring of data activities, and analytics of data risks.
Financial services can address cybersecurity challenges through a holistic approach integrating technology, regulatory adherence, and educational initiatives to combat evolving cyber threats.
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