Banks have been encouraged to train and upskill staff in fraud detection and prevention. Credit: Smile Studio AP/Shutterstock.

India’s Department of Financial Services (DFS) has asked banks to implement advanced fraud prevention technologies, including artificial intelligence (AI) and machine learning (ML), to enhance customer protection against fraud.

This directive was issued during a high-level meeting chaired by the DFS secretary with key financial sector stakeholders.

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The DFS Secretary, during the meeting with representatives from the Reserve Bank of India (RBI), public sector banks, private banks, and payment banks, stressed the urgency of adopting proactive measures to protect citizens’ finances.

The banks were introduced to MuleHunter.AI, an AI/ML solution developed by the RBI, which provides advanced capabilities in identifying and monitoring suspicious accounts.

In a social media post, DFS said: “Banks were directed to adopt advanced technologies, including AI/ML solutions, for real-time detection of mule accounts, training and upskilling bank staff on fraud detection and prevention, greater advocacy and awareness for common citizen for not to fall prey to the fraudsters.”

Emphasising the significance of advanced technology, the secretary called for the use of sophisticated tools to effectively counteract fraudulent activities.

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The secretary also underscored the necessity of educating customers about prevalent fraud tactics, encouraging them to remain alert.

Banks have been encouraged to focus on the training and upskilling of their staff in fraud detection and prevention techniques.

RBI Governor Shaktikanta Das had previously noted the RBI Innovation Hub’s efforts in promoting MuleHunter.AI for its specialised skills in detecting mule accounts used in money laundering.

This move is part of the government’s wider initiative to protect the financial ecosystem and reinforce the public’s confidence in digital banking.