Government created the “Financial Fraud Risk Indicator (FRI)” to allow for improved intelligence sharing between banks, UPI service providers, and other financial institutions in an effort to combat online fraud.
When a digital payment is suggested to be made to a cellphone number that has been reported by this instrument, the Financial Fraud Risk Indicator will improve cyber security and validation checks.
How Will Financial Fraud Risk Indicator Work?
According to a news release, FRI enables prompt, focused, and cooperative action against suspected frauds in the banking and telecom sectors.
“…Department of Telecommunications (DoT) has announced sharing of ‘Financial Fraud Risk Indicator (FRI)’ with stakeholders — an output from a multi-dimensional analytical tool developed as part of the Digital Intelligence Platform (DIP) to empower financial institutions with advance actionable intelligence for cyber fraud prevention,” it said.
The “Financial Fraud Risk Indicator” is a risk-based indicator that assigns a mobile number a “Medium,” “High,” or “Very High” risk of financial fraud, according to the explanation.
This classification is the result of information from a number of stakeholders, including intelligence supplied by banks and financial institutions, reports on the National Cybercrime Reporting Portal (NCRP) of the Indian Cybercrime Coordination Centre (I4C), and the DoT’s Chakshu platform.
“It empowers stakeholders — especially banks, NBFCs, and UPI service providers — to prioritise enforcement and take additional customer protection measures in case a mobile number has high risk,” the release added.
Regarding how early notice would be beneficial, it stated that the DoT’s Digital Intelligence Unit (DIU) routinely provides stakeholders with the Mobile Number Revocation List (MNRL), which lists all disconnected mobile numbers along with the reasons for the disconnections, such as failure to re-verify, involvement in cybercrime, or exceeding allowed limits. Financial scams also frequently employ these numbers.
“As the life of a mobile number that is misused in cyber frauds is generally few days, and full verification can take several days, an advance indicator on risk associated with such numbers is very useful. Thus, as soon as a suspected mobile number is flagged by a stakeholder, it undergoes multi-dimensional analysis, and classifies it into Medium, High, or Very High financial risk associated with it,” it said.
It then instantly distributes this numerical evaluation to all parties involved via DIP. As part of the PhonePe Protect function, one of the first FRI adopters, PhonePe, has utilized it to reject transactions associated with Very High FRI mobile numbers and provide an on-screen warning.
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