Indian fintech watchdogs laud RBI’s crackdown on KYC fraud.

TLDR:

• Indian fintech regulatory companies, such as IDfy, EMudhra, and Signzy, have welcomed the Reserve Bank of India’s (RBI) move to caution the public against frauds under the garb of know your customer (KYC) updation.
• These companies highlight the importance of fraud detection and prevention services in the face of increasing cybersecurity concerns as more fintechs emerge and small businesses embrace digital platforms.

Tech start-ups that offer regulatory services to financial institutions in India have expressed their support for the Reserve Bank of India’s (RBI) recent warning against KYC frauds. Companies like IDfy, EMudhra, and Signzy, which provide digital identity verification and online identity verification services, believe that fraud detection and prevention will be essential as more fintechs emerge and small businesses embrace digital platforms.

This move by the RBI is significant due to the rising instances of bank fraud in the country. According to a report by the RBI, frauds reported by banks in 2022-23 were at a six-year low, with the average amount involved in frauds being the lowest in a decade.

Signzy’s CEO and Co-founder, Ankit Ratan, emphasized the importance of a risk-based approach and customer vigilance in preventing frauds. He stated that businesses should adopt the risk-based approach introduced by the RBI, which balances regulatory compliance and customer convenience. Digital KYC and onboarding solutions play a crucial role in preventing money laundering and other financial crimes.

Similarly, IDfy’s CEO and Co-founder, Ashok Hariharan, stressed the need for customers to be cautious and verify the authenticity of platforms used for KYC updation. He warned against sharing personal information on platforms like Skype and urged customers to use only official channels provided by banks for KYC requests.

In conclusion, the support from these fintech regulatory companies for the RBI’s cautionary move highlights the importance of fraud detection and prevention in the face of increasing cybersecurity concerns.