A Comprehensive Analysis of Modern Approaches to Fraud Prevention and Detection in Online Banking and Credit Card Transactions

Abstract

Online banking has completely changed the ways of financial management, making it faster and quicker. This convenience is available at a very large cost, as fraudsters continuously update their methods with the appearance of newer vulnerabilities in online banking systems. This paper will be able to present a critical review of fraud types occurring in online banking transactions, such as credit card-related fraud, UPI-related fraud, Internet Banking-related fraud, and electronic fraud. Each one of this fraud types-whether it involves phishing attacks, payment fraud, or account takeovers-presents unique challenges in and of itself. Furthermore, fraudsters have increasingly adopted advanced methods to compromise banking systems with malware for sensitive financial data stealing, SIM swapping, and social engineering. Our findings suggest that, considering the increased sophistication of fraud, financial institutions have to employ multiple-layered security systems, better regulatory mechanisms, and more advanced technologies such as behavioral analytics and artificial intelligence in order to protect their customers from ever-evolving threat vectors. The paper thus identifies the need for recommendations on better adaptation mechanisms in fraud detection systems to make financial transactions across all touch points secure.