In a pivotal move to address the growing threat of digital financial fraud, the Department of Financial Services (DFS) has instructed banks to adopt advanced technologies such as Artificial Intelligence (AI) and Machine Learning (ML) to protect customers from fraud. This decision was made during a high-level meeting chaired by the DFS Secretary, with participation from representatives of the Reserve Bank of India (RBI), public and private sector banks, and payment banks. The meeting focused on tackling the increasing use of mule accounts to facilitate illegal transactions.
Banks have been instructed to implement AI/ML technologies to detect mule accounts in real time, train their staff in fraud detection and prevention, and raise awareness among citizens to help them avoid falling victim to fraud. The DFS emphasized the importance of using cutting-edge tools to proactively safeguard citizens’ hard-earned money.
Additionally, banks will be given access to MuleHunter.AI, an AI/ML-powered solution developed by the RBI to detect fraudulent activities and identify suspicious accounts. The directive also highlights the need for banks to prioritize staff training on fraud prevention, ensuring they are well-equipped to identify and address fraudulent activities.
The meeting also underscored the importance of collaboration among banks to share best practices and adopt a unified approach to preventing digital financial fraud. By fostering partnerships and exchanging ideas, the banking sector can enhance the security framework of the financial system.
This initiative is part of the government’s broader efforts to protect the financial ecosystem and maintain public trust in digital banking. By integrating advanced technologies and encouraging collaboration, the banking sector aims to strengthen its defenses against emerging financial fraud.
