Even as India entered the digital fast track on investments, credit and payments, digital frauds have also grown by 10 times over the last three years.
The apps, regulators, and digital security companies have been taking measures to protect the customers from such risks as India leapfrogged several steps in its digital journey, said panellists at the Network 18 Rising Bharat Summit 2026 in New Delhi.
The panellists included Securities and Exchange Board of India (SEBI) whole time member Kamlesh Chandra Varshney, PhonePe Lending CEO Hemant Gala, IDfy CEO and founder Ashok Hariharan and Equifax India MD Aditya Chatterjee.
For instance, the market regulator has worked with Google to ensure that all broking or market-related apps with SEBI Check, a tool allowing investors to verify if a payment link or a bank account actually belongs to a registered intermediary.
Google and SEBI verified apps
"We can proudly say that there are some initiatives which we have taken to protect investors' interests, to develop markets, to deepen market integrity, which no other country has done," said Varshney, of SEBI.
He pointed out that India’s digital infrastructure has reduced risks and fraud by introducing a same-day settlement to ensure that customer money reaches them faster.
"Our unique system, where the clearing corporation has full client-level visibility, not just broker-level visibility, prevents one client's fund from being used for another's obligations," he added.
Expanding formal credit
The paradigm shift has happened in lending, too, where digital transaction history has been helpful in bringing a new segment of customers to formal credit.
“The micro-merchant segment, which is essentially was on the fringe of the financial inclusion, never saw, intense amount of ability to access credit, and that is what we are trying to unlock, because with the QRs being there, there is an understanding of the business that the merchant is doing, there is understanding of the credit standing,” said Gala of PhonePe.
He added that digital payments have played a supporting role for lending to small merchants through its partners after unlocking daily repayment for this segment.
But the availability of easy digital credit has not been all positive, with high delinquencies affecting many lenders during the early days of buy now pay later (BNPL) boom.
“To make India creditworthy, the micro, which is 95 percent in size, but only 4 percent in terms of the volume of the loans have to grow,” said Chatterjee.
Reducing frauds
But while the inclusiveness can benefit millions, this has thrown open the possibilities of financial fraud at a massive scale by deploying the latest technologies like Artificial Intelligence. Financial inclusion has advanced far more quickly than financial literacy in the country, and fraudsters, often technologically savvy and geographically unconstrained, exploit this gap.
The financial fraud that occurs is reported to be around Rs 34,000 crore; however, if the unreported figures are added, this could be worth Rs 1,00,000 crore.
“We are seeing a lot more AI-originated fraud. One of the things with digitisation is that once you remove the person from physical contact, it is easier to commit fraud in some sense, right? Because you can kind of run engines on top of that, and you are not beating the person. So he can actually, if he gets through a hole, he can attack that 100 times,” said Hariharan of IDfy.
Earlier, the scamsters could probably attack only once, with most of them using all kinds of tools. “They are usually one or two steps ahead of us,” Hariharan added.
The company has developed technologies to identify deepfakes, to cross-check documents and KYC registries.
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