Financial incentives can boost innovation in Cybersecurity

Representational image. Moneycontrol

Ever since the introduction of the ‘Digital India’ initiative, India has been steadily inching towards a technology-driven economy. This was further accelerated by the onset of the COVID pandemic as governments and economies came to terms with the ‘New Normal’ and geared up for the long-term impact of the crisis by being digitally inclusive.

The increased adoption of digital activities, such as innovation in the payments landscape, regulatory support, and mobile internet penetration, has played a vital role in the rapid growth of digital transactions in India. However, adopting these advanced payment options has also generated unprecedented opportunities for fraudsters to perpetrate fraud by exploiting system loopholes and human vulnerabilities.

Industry data shows that 2022 has been the worst year so far for India regarding cyberattacks — a problem that has only grown with increasing digitalisation. PwC’s ‘Global Economic Crime and Fraud Survey 2022’ found that 51per cent of surveyed organisations experienced fraud in the past two years, the highest level in their 20 years of research.

Incentives to boost innovation

Despite the ever-compounding problem of digital fraud, last year’s Union Budget 2022 assigned a marginal share of only INR 300 crores out of the Rs 10,676 crore earmarked for the Digital India program. In May 2022, the Ministry of Electronics and Information Technology(MeitY) announced the allocation of Rs 515 crore towards various programmes to curb cyber fraud for FY 2022-2023. The ministry also launched the second phase of the Information Security Education and Awareness (ISEA) Project, allocating an amount of Rs 96.08 crore.

As the government prepares to present its FY2023-24 budget next week, we are hopeful that the budget will provide additional financial incentives to boost innovation and encourage entrepreneurs to develop identity verification solutions that can be used to tackle a range of problems, such as fraud prevention, KYC compliance, and identity theft to meet the evolving needs of the online world and help businsess foster with customer experience at paramount.

Need to secure online presence

With India poised to have 900 million internet users by 2025, there is a pressing need to secure our online presence. The government also flagged concerns about data protection last year and has announced strict norms as part of the Data Protection bill, keeping the safety of users at heart. Safeguarding and preventing data breaches is of utmost importance in a time when technology is constantly evolving. We are hopeful that the government will provide additional funding and incentives to encourage the development of a robust cybersecurity system in the country.

Sops and Subsidies wishlist

A multi-pronged approach is also needed to focus on several areas related to cyber fraud, including the regulatory environment, infrastructure, and the development of new technologies. Incentives and subsidies should be provided to organisations that adopt or upgrade their identity decisioning systems. While technology can be the backbone of a robust policy, implementing progressive data protection laws will help prevent discrepancies and misuse of user data. This will further strengthen people’s confidence in digital services and contribute to India’s economy.

With India poised to become a major hub for technological innovations, leveraging the latest advances in artificial intelligence (AI) and machine learning (ML) technology will improve the country’s digital infrastructure. Further investment in advanced AI and ML solutions will help detect attacks earlier, potentially allowing automated responses to cyber incidents.

These new-age technologies will help organisations protect user data while providing better identity decisioning methods for a smoother customer journey. Identifying previously ‘unseen’ attacks is a significant challenge, and using advanced technologies to detect such incidents is essential for a strong defence. The government should allocate more resources to improve connectivity and develop modern digital infrastructure, which will help make services more accessible and secure.

Looking ahead

The Indian identity verification and fraud prevention industry is on the cusp of exponential growth and the upcoming budget of 2023 can be a catalyst for this growth. Regulatory and policy reforms will ensure a conducive environment for the sector to thrive as a proactive investment in best practices and solutions for users’ cyber security and protecting identity has become the need of the hour for businesses across industries, especially in digital lending, e-commerce, gig economy, gaming, insurance, crypto to name a few. With the right measures in place, this budget could be a significant milestone in the evolution of the identity verification and decisioning space in India.

The writer is the Vice President – APAC & MEA of Bureau  Views expressed are personal. 

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