Soumya Prakash Pradhan

Financial fraud is a serious issue that can lead to devastating consequences for individuals and businesses.

In recent years, the Reserve Bank of India (RBI) has reported an increase in financial fraud cases, especially those related to card or internet-based transactions.

The RBI has also highlighted the lack of awareness among people to store sensitive financial data safely.

Here’s how to protect yourself from financial frauds, based on the RBI report and recent survey by LocalCircles.

Common modus operandi of financial frauds:

The RBI has issued a warning to people that financial fraud can transpire through different channels, including credit or debit card skimming, identity theft, or scams via social media, SMS, or telephone calls.

Hackers can easily obtain access to sensitive financial information by duping victims or exploiting weak spots in software and hardware devices.

It is crucial to be vigilant and adopt the necessary precautions to protect your financial data from cybercriminals.

Best practices to protect your financial data:

As per the RBI's guidance, to safeguard against financial fraud, it is vital to employ robust and distinct passwords for every account and refrain from utilising the same credentials across various websites.

A password manager can prove advantageous in efficiently managing passwords and generating potent, intricate passwords.

Moreover, it is critical to abstain from storing sensitive financial information on mobile devices, contact lists, or notes and instead use secure storage alternatives, such as encrypted USB drives, cloud-based storage or hardware-based security keys. 

Additionally, exercise caution when divulging identity proofs to governmental or private entities and ensure that only authorised personnel have access to them.

Promoting digital financial literacy

To increase risk awareness among individuals, the RBI has been implementing various initiatives to enhance digital financial literacy.

However, as per a recent survey conducted by LocalCircles, a significant proportion of people lack knowledge on how to securely store sensitive financial information.

It is essential, therefore, to augment awareness and education on cybersecurity best practices through various mediums such as social media, online training, and workshops.