Instant payments fuel demand for real-time fraud orchestration

The rapid expansion of digital payments, led by real-time systems such as Unified Payments Interface, is transforming the country’s fraud risk landscape, pushing financial institutions to adopt more proactive and integrated risk management frameworks.

Since its launch in 2016, UPI has become the backbone of India’s retail payments ecosystem, driving transaction volumes to unprecedented levels. With over 18,000 crore digital payment transactions recorded in FY25 and UPI accounting for the majority share, the scale and velocity of transactions have significantly increased the attack surface for fraud. Reported incidents have also risen sharply, with over 13 lakh UPI-related fraud cases annually and cumulative losses exceeding ₹2,100 crore since FY23, highlighting the growing sophistication and frequency of threats.

Unlike traditional payment systems, real-time payment rails leave little room for post-transaction intervention, making fraud faster, more distributed, and harder to contain. This structural shift is prompting financial institutions to move beyond reactive controls towards real-time fraud orchestration—where risk assessment, decision-making, and intervention occur within milliseconds before a transaction is completed.

At the same time, regulatory expectations are evolving. The Reserve Bank of India has increasingly emphasised the need for risk-based, proactive monitoring frameworks, encouraging institutions to embed fraud prevention within broader enterprise risk governance structures. This includes integrating technology, policy, and oversight to ensure resilience in an always-on payments environment.

Advanced technologies are playing a central role in enabling this transition. Artificial intelligence and machine learning models are being deployed to process vast volumes of transactional data in real time, identify anomalies, and continuously adapt to emerging fraud patterns across payment channels including cards, wallets, and instant payments. Meanwhile, behavioural biometrics is adding a new layer of dynamic authentication by analysing user-specific interaction patterns, helping detect social engineering and account takeover attempts without disrupting the customer experience.

According to Michael Sell, Senior Vice President at Global Association of Risk Professionals, these technologies are becoming foundational to modern fraud prevention strategies.

“Generative Artificial Intelligence (GenAI) and behavioural biometrics are valuable and evolving technological tools that enable next-generation, real-time fraud detection, particularly in complex ecosystems like India’s multi-channel payments landscape,” Sell said. “These systems continuously learn from evolving fraud patterns, enabling detection of anomalies across cards, wallets, and UPI without relying on static rules.”

He added that behavioural biometrics enhances fraud surveillance by verifying the authenticity of transactions based on users’ unique physical and digital interactions—an approach that is increasingly relevant as social engineering attacks rise.

“Such technologies should support a seamless, risk-based, adaptive authentication process within integrated risk management programmes that unify fraud, compliance, and operational risk,” Sell noted.

As India continues its rapid digitalisation and financial inclusion push, the convergence of real-time payments and advanced fraud detection technologies is becoming critical. For financial institutions, the challenge lies in balancing speed, security, and customer experience—making real-time fraud orchestration not just a capability, but a strategic necessity.