What a new report says about India's digital banking frauds

India's digital banking fraud is becoming more sophisticated, with the value of attempted fraudulent payments rising 35% even as attempted fraud sessions declined 12%, according to BioCatch's latest India report. The report also found a 146% surge in text-message-based scams, signalling a shift towards fewer but higher-value fraud attempts as cybercriminals adopt faster and more organised methods to target banking customers.

Fraudsters are acting faster

The report suggests fraudsters are executing scams more quickly than before. The average duration of fraud-related phone calls fell 31% over the past year, while the typical median value of attempted fraudulent transfers rose 1.7 times per fraud session. This trend indicates cybercriminals are spending less time convincing victims but targeting significantly larger amounts in each attempt.

Mobile banking emerges as the new battleground

BioCatch also found that fraud is increasingly shifting to mobile devices. Mobile fraud sessions increased 67% over the past year, including an 86% jump on iOS devices and a 35% rise on Android, while web-based fraud sessions declined 10%. The trend suggests cybercriminals are increasingly targeting customers through smartphones as digital banking activity continues to move to mobile platforms.

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Text-message scams gain ground

BioCatch recorded a 146% increase in text-message-based scams, while fraudsters increasingly relied on live phone calls to guide victims through transactions. The report also found that cybercriminals are moving away from traditional malware-based attacks and instead relying on quicker techniques that reduce the need for malware to compromise banking sessions.

Money mules fuel the fraud ecosystem

A major factor enabling these frauds is the growing use of money mule accounts—bank accounts controlled by individuals who knowingly or unknowingly transfer illicit funds on behalf of criminal networks. According to the report, fraudsters are increasingly recruiting mules through fake job offers and social media, operating organised networks that use legitimate bank accounts to layer and move stolen money rapidly through India's real-time digital payment ecosystem.

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The numbers behind the fraud surge

The scale of the challenge has expanded significantly. The report cited more than 8.5 lakh money mule accounts detected across over 700 bank branches in 2025. It also referenced 26.48 lakh money mule cases linked to cyber fraud complaints involving ₹22,496 crore, while the banking system prevented transactions worth ₹9,055 crore through the suspect registry that enables financial institutions to block transfers to identified fraudulent accounts.

Authorities step up the fight against cyber fraud

To counter the growing threat, Indian authorities are strengthening coordination between banks, law enforcement agencies and regulators. BioCatch highlighted recent initiatives, including collaboration between the Indian Cyber Crime Coordination Centre (I4C) and the Reserve Bank Innovation Hub (RBIH), to deploy artificial intelligence for identifying money mule accounts and improving fraud intelligence sharing across the financial ecosystem.   The report concludes that India's digital fraud ecosystem is no longer defined by the volume of attacks alone, but by increasingly organised, faster and financially more damaging scams that exploit trusted payment systems and organised money mule networks.

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