Context:
The Department of Telecommunications (DoT) unveiled the Financial Fraud Risk Indicator (FRI), a new advanced analytical tool designed to support financial institutions in detecting and preventing cyber fraud. This initiative is part of the broader Digital Intelligence Platform (DIP).
What is Financial Fraud Risk Indicator (FRI)?
- A multidimensional risk-based metric that classifies mobile numbers into three categories based on their likelihood of involvement in financial fraud:
- Medium Risk
- High Risk
- Very High Risk
- Helps banks, NBFCs, and Unified Payments Interface (UPI) service providers prioritize fraud detection and enhance customer protection measures.
Functionality and Impact
- Facilitates intelligence sharing between telecom, banking, and digital payment sectors.
- Supports proactive fraud prevention by allowing institutions to decline transactions linked to high-risk mobile numbers.
- Example: PhonePe has adopted FRI to block transactions from “Very High” risk numbers and provide user alerts via its PhonePe Protect feature.
Significance
- Enhances cybersecurity and fraud detection in the fast-growing digital payment ecosystem.
- Enables financial institutions to focus resources effectively on high-risk cases.
- Strengthens collaboration between telecom and financial sectors to curb increasing cyber fraud threats.
