Are the new digital payments safe?

Changing expectations and behaviours have altered the basic relationship between banks and their customers. There is a changing landscape in terms of how payments are being made and how different entities other than the traditional financial institutions are coming in to increase financial inclusion in India. The government is also pushing usersto adopt digital channels of payments by bringing policies that support both, the customer and the merchant, during a transaction. Instruments such as mobile wallets, Aadhaar Pay, Bharat QR, UPI and others are catching up. The questions that pops in the mind of every consumer before using these methods are -- Is it safe to use these new instruments to make payments? Is the information that flows during a financial transaction safe? The answer to these questions lies in understanding the technology behind such instruments and the business practices incorporated by the institutions that provide these services.

Security over time has evolved and become better. With the introduction of new age technologies like artificial intelligence, machine learning and advanced learning algorithms being part of the new financial crime management solutions, a lot of discovery is going into identifying new loopholes that have the potential to be exploited, and steps are being taken to make it safer. Security from a system perspective is continuously increasing.  

Making digital transactions safe has two aspects to it, one being the technology behind it and the other being financial literacy  amongst the population using it. Just as people are careful while carrying their cash around and take protective measures, the same needs to be followed while  performing digital transactions.  

By improving both technology and financial literacy, the digital payments space will be able to provide robust, convenient and seamless services to people. Looking at how technology is improving for people to do safer digital transactions, the improvement in the authorisation process is one aspect to consider. The inclusion of biometric authentication during transactions is a step ahead in increasing the trust of consumers. To make the system more secure in the future, usage of dynamic fingerprint sensors against the use of static sensors would also play a major role. Also, Iris recognition would help us move forward in terms of how secure our transactions are. Now, looking at financial literacy, people need to be educated in what kind of information should or should not be shared. Also, the knowledge of the risk involved in doing transactions on public networks need to be communicated.  

The other very important parameter in increasing safety in digital payments space is vigilance and detection of fraud at early stages, hence integration of better and more sophisticated fraud management and mitigation are very important so that the responses for any kind of threat detected  are already present in the system. Financial institutions are using such software to prevent fraud and infiltration from the outside environment into their system. Apart from this, there are various other practices followed by some financial institutions, such as storage of data at a consolidated level in secure servers, role based access to the employees and analysis of behavioral patterns of employees using the banking software to perform day-to-day operations to keep the data of their consumers safe and secure.  

One must keep in mind, that real time payments are not just about speed. It is about letting trade happen seamlessly and efficiently in a financial world where entire payments happen easily and immediately. The future is towards having frictionless digital payments, personalised services for every customer based on their behavior and transaction history, and reaching the last mile with the help of cutting edge technology, and for that to happen, the fear of using technology in people must drastically go down. With the advancement of technology and availability of resources, it's possible for frauds to occur but it is surely becoming difficult. The key to being safe, be it cash or digital transactions, is vigilance by all the stakeholders such as the regulatory bodies, the technology providers, financial institutions and consumers of such services.  

The future will lead to continuously improving technology and with that an effort to increase awareness about how to protect yourselves from frauds by following certain protocols of keeping your passwords, card details and other documents which have sensitive information safe. Financial institutions will help customers build a trust in using technology and adapt to the changing modes of digital payments in a cashless and digital India.  

(The writer is Fidelity National Information Services  Regional Managing Director - India and South Asia)