RBI Selects Six Fintechs To Tackle Financial Fraud

The Reserve Bank of India has selected six fintech entities as part of a regulatory sandbox initiative that aims to prevent and mitigate financial fraud. 

The selected entities for the ‘Test Phase’ are Bahwan Cybertek, Crediwatch Information Analytics, Wibmo, napID Cybersec and Trusting Social. Besides, banking major HSBC has also been selected, in collaboration with Wibmo, by the RBI. 

In simple terms, regulatory sandboxes allow companies to test new products or services in a controlled regulatory environment. This enables companies to scale up their offerings, innovate, bring efficiency and devise solutions for new-age problems. 

The entities will begin testing their products next month. 

The announcements were made as part of the fourth cohort of the sandbox scheme that invited applications in June last year. The central bank received nine applications out of which six were selected. 

Chennai-based Bahwan Cybertek has developed a real-time comprehensive mechanism for monitoring transactions and events from loan accounts. Crediwatch has developed an early warning system that combs through public and private data sources for credit monitoring and fraud identification.

Similarly, napID Cybersec’s product authenticates user credentials on login forms, payment forms, ATMs, and point of sale (PoS) machines. 

“The product ‘Trusting Social CI & AV’ helps in address verification by running its proprietary AI algorithms on non-personally identifiable data on subscriber usage, location signals and other such parameters to predict residential and office address of users. This helps to verify the accuracy and stability of address/location declared by prospective customers. Further the credit insight feature uses mobile,” the RBI said, while describing the product of Trusting Social. 

Meanwhile, Bengaluru-based Wibmo saw two of its products featured on the list. One of its products offers OTP-less transactions for low-value transactions based on risk assessment of users. 

Banking major HSBC was also selected as one of the entities. Its product included a closed user group AI/ML-based solution to curb card-not-present frauds.

The RBI has worked with multiple startups earlier as well for its sandbox initiative, which led to startups tinkering with interesting subjects such as digital payments for feature phones. 

Eventually, the effort spawned a slew of new players such as ToneTag, Citycash, and IND-e-Cash, among others. Not just this, the learnings from the project were deployed to unveil products such as UPI 123PAY, which allows users to pay through voice calls. 

This is the fourth iteration of the regulatory sandbox initiative. The RBI invited applications for the first cohort on the theme Retail Payments in November 2019, and followed it up with the second cohort on Cross Border Payments in December 2020. Subsequently, the third cohort was announced in September 2021 on the theme MSME Lending.