Youngsters, especially college students, always face a shortage of funds and look for alternative ways to earn quick and easy money. But sometimes these easy options prove to be costly later.
How?
Take the case of Ramesh, a young boy who graduated from one of the colleges in Delhi, received a call from an unknown number. The caller on the other side offered him a chance to earn money just by renting his bank account.
In return, the caller offered him a decent amount of money.
What else does Ramesh need?
Without considering the drawbacks he shared his details with the caller. For every ₹1 lakh transferred to his account, he gets ₹1,000. Everything seemed fine until the day he received a summons from the Cyber Police with the information that his account had been blocked as it was linked with frauds & scams.
And in this way, he unknowingly becomes part of a criminal network. His account turned into what is commonly known as Mule Account, the kind of account that is used to circulate illegal funds.
With the rise of such mule accounts, scammers have built their networks to launder money and carry out scams. To combat such issues, the Reserve Bank of India has introduced the groundbreaking tool MuleHunter.AI.
It is used to track such accounts in real time. Let’s understand how this tool is going to work and how it would help in tracking fraudulent activities.
How MuleHunter.AI Works?
Now scammers generally target two types of people to operate mule accounts:
- Innocent victims: People unknowingly provide access to their accounts for fraudulent activities.
- Willing participants: People who allow access to their accounts in exchange for money.
Regardless of the type, the victim always suffers, often losing their hard-earned money.
With the introduction of MuleHunter. AI will help banks identify and track such fraudulent activities and the circulation of funds in real time.
This is how the tool works:
1. Tracking Financial Activities Across Different Accounts in the Real Time
The tool will identify the financial transactions across different accounts and identify red flags if any of the transactions happen through an account that has been dormant for months.
Other than this, the tool identifies accounts circulating funds to other bank accounts across the country. Based on that regulators & law enforcement firms will do further investigation.
2. Tracking Activities & Connecting the Dots
Fraudulent activities are generally operated in isolation. The tool will be used to identify connections between accounts by checking phone numbers, IP addresses, and transaction patterns.
For example, the tool will identify the number of transactions happening from one account in an hour. If something is found suspicious then that account will be tracked to discover fraudulent activities, if any. This would stop the scam at the right time preventing further damage.
3. Real-Time Actions
Financial fraud can be stopped if detected on time. The tool for identifying any fraudulent activities will generate an alert and notify the bank. The bank immediately takes necessary action and freezes the account
Along with AI, banking teams & investigators also play their role to avoid any kind of unusual activities or wrong detection. For example, consider a small business, doing a transaction of a large amount in the festive season.
AI will identify it as a scam. Here comes the role of humans who will check & validate the alert generated by AI before taking a necessary action.
How MuleHunter.AI Would Be Beneficial?
By deploying such tools RBI would be able to reduce the number of scams that eventually help in:
- Building public trust in the digital banking system.
- Disorganizing the organized financial crime networks.
- Strengthening India’s Anti-Money Laundering System.
Upcoming Challenges With the Use of MuleHunter.AI
Every development comes with certain challenges and so does MuleHunter. AI.
Here are some of the issues that may arise with the use of this tool:
- False Signals: Since it is an AI tool and thus works based on information fed. There are chances that the tool identifies some of the legitimate accounts as fraud in case a high transaction takes place from such accounts.
This may cause unnecessary inconvenience to users. - Evolution of Fraud: With the system, fraudsters also evolve themselves and find ways to hack the existing system. In such cases, it becomes vital to keep on upgrading this tool to keep it one step ahead of fraudsters.
- Data Sharing: To keep things in check and for timely actions banking partners, regulators, and law enforcement firms need to stay aligned with the AI tool.
Closing Thought
The development of such a tool would no doubt help in reducing the number of fraudulent activities and help people reduce the loss of their hard-earned money.
The more scams and frauds type the tool will detect, it will become more intelligent, making it difficult for scammers to hack the Indian Banking System.
So, the time has finally come when you stay active on your bank account someone behind the scenes is actively working tirelessly to track your activities and prevent your account from the reach of scammers.
