An Analytical Study of FinTech Frauds in India: Types, Trends, and Ecosystem Vulnerabilities

Financial technology (FinTech) has reshaped the delivery of financial services in India. UPI, digital payment, Internet banking, card-based payment, and App-based services have gained in usage. Although the wider access has resulted in improved speed and convenience, it has also made users and institutions more prone to digital financial frauds. This study on fin tech frauds in India aims to fulfil three objectives. First, to identify and classify the major types of fin tech frauds. Second, to analyse the historical trend and year wise pattern on the basis of available secondary data. Third, to find out the various vulnerabilities in the eco system for frauds. This research is descriptive and analytical in nature and based on secondary data. Using a structured review of selected literature and payment-system indicators, as well as domestic payment fraud statistics, contained in the uploaded dataset. The analysis categorises FinTech frauds into four broadly: social engineering frauds; technical frauds; identity-related frauds; and transaction or platform-related frauds. The trend analysis indicates that there has been a substantial increase in the domestic payment fraud volume, fraud value and fraud intensity during the available period concurrent with the significant growth in payment systems especially UPI and source infrastructure. The study finds that fraud vulnerability is not just a user problem. Rather, it is the result of interacting weaknesses at the user, platform, institutional, and regulatory levels. The investigation suggests that FinTech fraud in India is more an ecosystem problem than a mere technological misuse problem. According to the study which was published as an article by Digital Finance Outlook 2022, Faster Institutional Response, Stronger Awareness System, Enhanced Interface Safeguards and Coordinated Regulatory Evolving are essential for the Safer Digital Financial Growth. Moreover, the explosion of digital finance has increased exposure surface for fraud.