RBI Regulatory Sandbox’s 4th Cohort on Financial Fraud Prevention Completes Testing Phase

To enhance financial security, Reserve Bank of India (RBI) has successfully completed the testing phase of the fourth cohort of the regulatory sandbox (RS) focused on the prevention and mitigation of financial frauds. Six entities participated in this initiative that started from 5 January 2023 to develop and test innovative solutions for combating financial frauds.

In a release, RBI says, “Following rigorous evaluation based on predefined test scenarios and expected outcomes, three standout products have been identified as viable solutions within the established parameters of the regulatory sandbox. These products demonstrated promising capabilities to enhance financial fraud prevention and mitigation efforts.”

Bahwan Cybertek Pvt Ltd, in collaboration with IDBI Bank, has developed ‘rt360 real time monitoring system’, a cutting-edge technology designed to aid banks in monitoring transactions in real-time or near real-time. This system analyses transactions and generates alerts, enabling proactive follow-up and action to thwart potential fraudulent activities.

NapID Cybersec Pvt Ltd, in collaboration with City Union Bank, offers the ‘napID fraud filter layer’ a robust solution to secure online transactions. By locking login and payment forms and unlocking them only for authorised users through the napID pre-authenticator app, the solution ensures that compromised credentials or cards become ineffective in the hands of fraudsters.

Trusting Social Pvt Ltd, in collaboration with Protium Finance Ltd and Finnovation Tech Solutions Pvt Ltd, introduced ‘credit insight (CI)’. This product leverages mobile subscriber data to risk-rank active subscribers and evaluate the risk of loan default. It is particularly useful for conducting instant creditworthiness checks for individuals new to credit, thereby facilitating more secure lending processes.

All three entities have now exited the fourth cohort of the regulatory sandbox, with their products deemed acceptable for consideration by regulated entities, RBI says adding, adoption of these solutions is subject to compliance with applicable regulatory requirements.

In line with the provisions of the enabling framework for the regulatory sandbox, the fourth cohort on prevention and mitigation of financial frauds is now open for ‘on tap’ application and interested parties can submit their applications via email, ensuring the scanned copies and enclosures do not exceed 10 MB in size, the banking regulator says.

According to RBI, the successful completion of fourth cohort marks a notable advancement in the fight against financial fraud, providing regulated entities with innovative tools to enhance their security measures and protect their customers