India's fin-tech revolution gets security backbone

India’s economic growth depends on digital trust.

- SUDHANSHU KUMAR

This is not abstract. We often talk about financial inclusion in our daily lives as an important element for India’s economic growth.But, the real financial inclusion in India happens when a farmer in Haryana can receive government subsidies instantly through UPI, when a woman in Bihar can access credit through mobile banking, when a small manufacturer in Tamil Nadu can sell to buyers across India through digital platforms. However, all of this presupposes a functioning, trustworthy digital infrastructure.

It is important to acknowledge here that the current state of digital infrastructure is very fragile. Though millions of Indians have adopted digital payments smoothly, fraud is growing faster than adoption. For instance, in 2024, UPI fraud rose 85%. High-value fraud cases jumped 400%. At this trajectory, public confidence in digital systems will erode before we've finished building them. In this context, the numbers also tell a sobering story. According to the Ministry of Home Affairs, Rs 22,845 crore got lost in 2024. That's Rs 62.6 crore every single day. That's enough to fund seven medical colleges daily but that wealth is being transferred directly from Indian households and businesses to criminal enterprises abroad.

India processes more digital transactions than almost any nation on Earth. This is a source of great competitive advantage that leapfrogs card networks. UPI processes more transactions daily than Visa and Mastercard combined. The architecture is elegant, accessible, and inclusive. But we've also created enormous targets for international criminal networks. The architecture was built on an assumption that phone numbers, being verified through government KYC, could serve as reliable identity proxies. That assumption breaks down when phone numbers can be transferred remotely to foreign servers and used for fraud without any geographic anchor to India.