With the rapid growth of digital platforms, the risks associated with digital identity in India have risen sharply. A global cybersecurity company reported that in the first quarter of 2024, nearly 17.1 million online accounts in the country were compromised. This breach led to the exposure of sensitive personal data, including passwords, email addresses, and other identifying information.
Banks and Financial Institutions in India exercise mandatory regular reporting of detailed financial and operational data to their regulators to ensure compliance with the standards on capital adequacy, risk, and liquidity. According to a report by the Bank for International Settlements, over 70% of financial regulators are deploying AI-driven supervisory technology.
In today’s economy, money no longer moves in larger waves but in small droplets that enable easy, seamless border crossings. These microtransactions include everything from in-house purchases and gaming skins to gig worker payments and stablecoin transfers. According to data, a single network of fraudulent accounts can potentially move ~USD$4.5 million into games through microtransactions.
Financial Institutions and Regulated Entities today operate under constantly evolving anti-money laundering (AML), sanctions, and financial crime prevention rules. In the current context, Regulatory Technology (RegTech), supported by Open Data Intelligence, is a crucial solution to mitigate regulatory risk, enhance transparency, and enable smarter compliance outcomes.
Compliance has evolved from basic record keeping into a vital driver of governance, risk management, and ESG accountability. As regulations grow more complex, manual processes increase costs and limit agility.
A digital twin is a virtual replica of physical objects, processes, or systems, like customer transaction patterns, that is updated in real time with data streams. These are then used to understand how the processes work in the real world. In banking and financial services, it helps institutions to create a digital twin of the financial models and operational workflows to allow banks to test and validate so as to prevent regulatory non-compliance.
While regulatory penalties can exhaust budgets, the wider and long-lasting impact lies on the reputation, loss of trust, and operational disruptions. As regulatory bodies strengthen enforcement and governance standards expand, businesses can no longer afford to underestimate the impact of compliance failures.
In today’s world, almost everything has shifted to digital platforms, from banking, voting, social interactions, to even investing. At the same time, fraudsters have used this evolution to generate AI content, deepfakes, and bot networks.
Over the past few years, money launderers have found new techniques to defraud individuals and organizations. Money laundering has continued to take numerous forms, especially with the digital evolution. It may be a web of tokens, cross-chain tools, and digital ecosystems to disguise illicit funds, which challenges even the most advanced compliance systems.
In this interview with Fortune India, Deepak Bhawnani, Managing Director of Gurgaon-based tech-enabled risk mitigation firm FIOS, discusses why fines are increasing, where banks fall short, and how technology and third-party intelligence can help cut regulatory risk.