Mobile app usage in India has skyrocketed in the past five years and innovative businesses are disrupting the digital industry like never before. But fraudsters are evolving just as quickly. In order to protect their users, mobile businesses must tailor their fraud prevention approach to the new mobile landscape.
We invited senior risk and product executives from India’s leading and fastest-growing mobile apps for a virtual roundtable to explore the next chapter of fraud prevention opportunities. Guests present included executives from Zomato, Jio, Ola, PhonePe, Airtel, and more. The session was moderated by K K Mookhey, Founder of Network Intelligence, and featured guest speaker Mithun Madhusudan, Director of Product Management at India’s largest vernacular social network, ShareChat.
The state of mobile app fraud in India
Smartphone penetration rates in India have more than doubled since 2016. Looking specifically at mobile app usage, guests present at the discussion agreed that digital payment and e-commerce apps were amongst the fastest-growing industries.
The audience, comprising executives from both leading and fast-growing mobile apps, discussed the challenges of balancing hyper-growth and risk management.
The challenge of balancing hyper-growth and risk management
Participants agreed that it is easy for fraud prevention to take a backseat when a company is experiencing hyper-growth. But they also acknowledged the dangers of fraud and the consequences of deprioritising fraud prevention. As one executive aptly put:
“We call it fraud, but fraudsters call it opportunity. The business wants to grow faster, but at the same time we want to be secure and compliant. It’s a tug of war and we need to find balance.”
Innovating with and within government regulations
When it comes to the challenge of managing risk and growth, regulations can be a boon or a bane. Although one of their main intentions is to protect users from potential harm, government regulations can also end up introducing obstacles to an organisation’s growth. The guests discussed the pros and cons of India’s increasingly complex regulations in relation to their industries.
Those from the digital payments industry found keeping up with ever-changing regulatory requirements particularly challenging. Product teams often had to put in place additional safeguards or implement spending limits, which sometimes led to added friction for their users.
However, others noted that regulations could also be seen as a springboard for innovation. Some brought up examples of how leading apps saw regulations as a welcome challenge, and built products that were both compliant and delivered a great user experience.
Several participants shared that they could help shape future policies and regulations by engaging proactively with regulators. They felt it was productive to share usage data, recent fraud trends, user feedback, and more with the authorities, including showcasing the ways they dealt with the problems they encountered.
Building trust and safety on mobile apps
Many guests shared anecdotes of how their apps had been targeted by fraudsters. One participant in particular shared their personal experience of being a victim of account takeover.
“These breaches have a very serious impact on customer retention. Personally, I stopped using an online shopping app after discovering that my account had been taken over.”
Participants subsequently shared their views on how prioritising trust and safety can positively impact user retention. Most were concerned about the lack of fraud awareness amongst non mobile-savvy users which could lead them to use unsecured platforms. This could result in them losing money or personal data.
All participants agreed that having adequate and prompt security measures is one way companies can help build trust. Providing a stellar user experience was recognised across the board as the key to long-term user retention.
The makeup of a successful fraud prevention strategy
The general consensus was that while preventing fraud should be a key part of any growth strategy, it is easier said than done.
Participants were split on whether to build or buy a fraud prevention solution. Those in favour of the in-house approach cited the autonomy it provides as its main draw. Organisations know their businesses best, and therefore can tailor fraud prevention systems to their specific needs, complete with local knowledge, and rely on a library of data directly from their own user base.
On the other hand, those that favored buying third-party solutions cited the huge amount of time and effort required as the main barrier to building in-house solutions, especially when the same competing resources are needed for the main product.
Taking organisational bandwidth into consideration, participants came to the consensus that a hybrid strategy would offer the ideal balance in terms of time-to-market and resource investment.
One of the main benefits of partnering with third-party providers highlighted by several participants was the access to a global network of intelligence. Participants felt that this feature gave their risk and product teams first-hand insight into the latest fraud trends and patterns, which would allow them to focus on scaling their main product offerings while still mitigating risk.
When asked what the ideal fraud prevention partner should offer, one participant highlighted how ease of integration with existing products and the flexibility of a solution to client customisation were deciding factors when considering fraud prevention vendors.
To round off the session, participants agreed that being able to scale securely amidst an evolving mobile landscape would be a testament of their dedication to user trust and safety.
As a fraud prevention partner for many of the world’s leading mobile apps, SHIELD is committed to helping companies turn the challenges that come with growing fraud risk into opportunities for growth.