How To Secure Your Financial Data

Amid a surge in cyber frauds, regulators are tightening the grip on scamsters by adding multiple layers of security to shield your financial data. Here's a look at how they work

- Teena Jain Kaushal

MOST PEOPLE SEEM oblivious to the potential threat of financial data theft and its extent. Till some time ago, financial transactions were limited to physical counters, which left little scope for financial frauds. But now, more people than ever are banking and making payments online. The pandemic has further accelerated the shift from physical to digital payments. The rise of fintech companies has also aided this surge. According to data from the Reserve Bank of India (RBI), the share of digital payments in total payments increased to 96.32 per cent at the end of FY22 from 95.4 per cent in FY20. The RBI Digital Payments Index, which tracks digital payments, was up 29.08 per cent, to reach an all-time high of 349.3 points in March 2022 from 270.59 points a year ago. With the exponential rise in the number of digital transactions, however, the threat of cyber frauds compromising your financial data has also jumped manifold.

From hacking to stealing, crooks have found innovative ways to defraud the public—through system malfunction, accidental release or not following security procedures. Any of these can expose your financial data. And it is not just the common man who faces the threat, as even celebrities like actors Rajkummar Rao and Sunny Leone have recently become victims of such frauds. It shows how susceptible the system is to breaches. Loans were taken out in their name using their KYC details, even though they had never applied for them. Though the amounts were small, it impacted their credit scores. This is just the tip of the iceberg, as these cases were the ones reported in the media. There are thousands of such incidents that are never reported.