Financial frauds double to 37% in India: FIS study

Chennai: There is a dramatic correlation in India between booming adoption of mobile apps, digital payments and increasing rate of financial fraud, said a report.

Financial fraud has grown substantially since last year in the country, with the share of victims doubling to 37 per cent of respondents and all age segments falling victim to fraudsters, said the report by financial services technology firm FIS.

The age group of 27 to 37 was the most impacted by financial fraud than other age groups, it added.

FIS’ fifth annual PACE report highlights that 96 per cent of Indian consumers who were victimised by financial fraud during the last year had switched to a mobile app and digital payments, from cash as mode of payment. It significantly impacts country’s efforts towards financial integration, the report said.

Mobile payments are rapidly gaining traction, especially among Gen Yers (aged between 18 and 26) who are a prime audience for banking providers, the report said.

In this respect India is far ahead of the US, UK and Germany in mobile payment adoption, it said and added that convenience and a user-friendly interface, coupled with rapidly improving, low cost mobile data connectivity and merchant acceptance, are driving the growth of mobile payments.

It also noted that mobile apps now serve as the digital ‘face’ for many banks, and a record 41 per cent of bank interactions are now performed via mobile device. Nine in 10 Indian consumers are interested in social media engagement from their PFIs, it said.

Making a note of customer satisfaction, the PACE report said customers of top 50 global banks and private sector banks are less satisfied than they were in 2018.

However, public sector banks—traditionally seen as slow to react—saw their proportion of ‘extremely satisfied’ customers climb considerably, rocketing from the worst-performing category to the best. It’s clear that innovation is no longer restricted to a certain set of banks. About 28 per cent of young Gen Yers and 35 per cent of older consumers (53+) are not satisfied with their banks.