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We are now in an era where banks seamlessly fit in our pockets, accessible with a tap or swipe. Now, they no longer need to dig into their wallets or visit banks—welcome the new normal of a cashless society, where digital transactions easily serve you. 

As a result of digital transactions leading the way, The Hindu specifies that in 2012-13, there were 162 crore digital payments. This number has grown to 14,726 crore in 2023-24 till February.

Guess what, as the world rewrites this financial narrative, where the borders are invisible and innovation is the new invention, FinTech interconnects traditional banking into a digital experience better than ever before.

With technology leaving its footprints along the way, it becomes prudent to know how this revolution is underway, reshaping the very core of how we interact with money. This has indeed paved the way for this declared financial renaissance, where technologies are employed to strengthen digital transactions even more.

But this is not it.

Digital transactions are targeted by scammers. Misappropriation of data, phishing attacks, and payment scams have been too popular to be unseen in the newspaper headlines.

Well, to combat these threats, it is vital to implement robust cybersecurity measures and educate individuals on best practices for online safety. Businesses and consumers alike must adopt advanced security protocols to mitigate the risk of data breaches with employed technologies at your disposal.

Technologies to enhance security in digital transactions:

Artificial Intelligence and Machine Learning: When in the digital market, your transactions happen in a blink of an eye. Amid this hustle, fraudsters are seen waiting to strike. This is where artificial intelligence (AI) and Machine Learning ( ML) come to the rescue.

Just as a stitch in time saves nine, so does the applied power of AI and ML algorithms to detect fraud early in real time. They watch your transactions, spot anything unusual and keep your money safe. With AI and ML on guard, you can relax and trust that your transactions are secure. As a technological saviour, it can analyse transaction patterns and identify anomalies, to safeguard your transactions.

Two-factor authentication (2FA): In light of your digital transactions, implementing two-factor authentication acts as an armour by adding an extra layer of security by encouraging users to provide two forms of identification before accessing their accounts. 2FA is like a belt and braces, that reinforce the concept of having multiple layers of security. As an outcome, even if the password is compromised, the additional authentication steps prevent unauthorised access.

Cloud security solutions: Cloud security solutions offer rock-solid, scalable, and flexible protection for digital transactions conducted over cloud platforms. Think of it as a superhero cape for your data. Well, not only does it ensure compliance with regulations, but it also uses firewalls and backups to uphold your data integrity. Not to miss, its robust, reliable, and resilient approach translates your digital transactions into a fortress of security.

Virtual private networks: Imagine you’re in a bustling, chaotic marketplace. And, you are carrying a priceless artefact, a piece of information so crucial that its secrecy is paramount. This is the essence of a Virtual Private Network, your cloak of digital communication. 

Now, just as you would preserve your valuable item, a VPN secures your digital transactions, creating a private, encrypted path for your data to travel safely over the internet. In a nutshell, a VPN does not encrypt your data but shields it from unauthorised access, keeping your data safe as the houses.

Blockchain technology: The introduction to the art of blockchain technology is well understood within the context of using computers to validate and record transactions. These are somehow stored in blocks, which when linked together form a chain. Now, once the transactions are already added, they cannot be changed, while ensuring they remain safe and permanent.

No wonder, this technology employs advanced encryption to protect the data and enables multiple computers to agree on any new transactions, making fraud very difficult. In a way, it creates a transparent and secure system, where all transactions can be independently verified and trusted.

With such technologies, we have built a fortress, while illustrating the strength and security of digital systems better than ever.

As we witness our verification APIs preventing fraud activities, we understand our technological astra coming into being. With the technology being a boon disguised as a blessing, we instantly confirm the legitimacy of transactions, user identities and account details. As a Sherlock, it checks data against various databases, employing advanced algorithms and real-time verification that can spot possible red flags as anyone today would say, while minimizing fraud, before contributing to damage.

Benefits of technology for verification 

1.    Imagine fraud activities as cunning thieves, always looking for an opportunity to strike. However, we have a powerful ally outside, with technology as our vigilant watchguards.

2.   Our advanced algorithms are skilled detectives, as they continuously monitor transaction patterns, improve accuracy and ensure that legitimate transactions aren’t mistakenly flagged.

3.   With real-time verification, our technology ensures that every transaction is scrutinised the moment it happens, more like a security guard checking IDs at the entrance. This very immediate action stops fraudsters in their tracks itself.

4.   Additionally, customers can feel more secure, knowing that our system is always on alert. One must know, that this trust is crucial, as it means they can focus on their business without worrying about the safety of their transactions.

In times, when billions of dollars change hands every day, the battle against fraud is relentless. As a leader, my vision aligns with the commitment to innovation and security, which recognizes three pivotal pillars in this fight, ranging from real-time verification, secure APIs and comprehensive customer education.

Real-time verification: The first line of defence

I believe that in an online marketplace, every transaction should be thoroughly scanned in real time. This is the essence of real-time verification. As a leader, the key to preventing fraud lies in catching it as it happens, with technology being an enabler.

For instance, there was a time, when our system flagged unusual transactions in one of our customer’s accounts late one night. With our APIs on guard, we detected the fraud and immediately stepped in to prevent the loss of the customer’s funds. This quick response protected our customers and reinforced their trust in our services. For instance, real-time verification APIs keep fraudsters at bay by analyzing transactions every step of the way.

Secure APIs: The backbone of safe transactions

APIs are the unsung heroes of digital transactions; they connect different systems to facilitate smooth operations. However, they can also be potential entry points for cybercriminals if not properly secured. With it, we have catered to the development of secure APIs, encouraging robust encryption and authentication mechanisms.

In one notable instance, a partner bank’s API was targeted by cyber attackers. Thanks to our secure API protocols, the attack was thwarted, and no sensitive information was compromised.

This incident underscored the importance of having ironclad security measures in place, ensuring that our digital infrastructure remains impenetrable.

Empowering users against fraud

I believe that having an army of informed customers is our strongest ally in fighting against fraud. I recommend initiating and educating customers about the security of digital transactions via webinars and workshops to help them grow more aware of the risks that may come with it.

In the dynamic landscape of digital transactions, the significance of real-time verification, secure APIs and customer education cannot be overstated. With this, we have a robust defence system that not only safeguards transactions but also empowers our customers. Accordingly, this multifaceted approach ensures we remain ahead of the cybercriminals while fostering a secure and trustworthy digital environment for all.

S Anand, Chief Executive Officer and Founder of PaySprint, a fintech venture.