It takes seconds to move payments today. Faster than you can think twice. Faster than you can react. While this is a significant milestone in the evolution of both finance and technology, it creates opportunities for fraud, as there is insufficient time to detect risks within this short timeframe. Wherever finance is concerned, fraud is the default companion, and it has stayed loyal ever since.
From Harshad Mehta to Nirav Modi, the fraud story hasn’t changed a bit. But why have we not been able to detect or stop these frauds? For that, we need to understand why fraud happens in the first place. Fraud has never been done purely to make money, but rather by finding loopholes in the systems, be it weak controls, disconnected networks, or invisibility. This disconnection within systems serves as the playground for those who know how to exploit it to their advantage and make it big (losses for the country and the institution involved).
Frauds don’t start as grand schemes. They start as small, unnoticed gaps in the system, long ignored for years, deeply embedded in systems until someone spots them and pushes them far enough to become a crisis.
What Enables Fraud to Happen?
No matter how different these frauds appear, they are built on the same cracks. And it always begins here:
Inefficiencies in the System
Banks function on multiple interconnected systems, including SWIFT and Core Banking, where Society for Worldwide Interbank Financial Telecommunication, or SWIFT, is used for international payment messaging, and the Core Banking System, or CBS, is for recording and reconciling domestic transactions. These systems are designed to function in sync, ensuring that every transaction is reflected across the bank’s records.
However, if the integration is interrupted, control breaks down too. If transactions are sent via SWIFT and not recorded in CBS, then the bank doesn’t have any record of those transactions, but money is flowing out. Such disconnects in the system create blind spots, and for years, transactions continue undetected. Nothing appears wrong on paper, but in reality, everything is.
Lack of Visibility
Imagine coming across a company that looks legitimate. Everything is normal, like invoices being raised and payments being made. But the company isn’t doing anything. This is actually a shell company that serves as a layer created to move money around without drawing attention. As soon as the money starts moving through them, the transaction trail gets blurry. These transactions are not recorded officially. They exist in emails, side agreements, and disconnected tools.
These transactions are either in mail, side agreements, or tools that are disconnected. There is no single designed system to give a clear picture of the events or transactions that are happening. Since there is no official record, no audit trails, and no accountability, these transactions cannot be questioned. In such environments, concealment is built into the absence of visibility.
Process Failures
Exceptions are a routine for a finance team in the organization. When an urgent payment comes in, standard approval workflows take a backseat. A vendor shares updated bank details, but there is no formal verification for the same. An invoice shows up twice in two different threads. Both get processed. Individually, these scenarios may seem operational in nature, not fraudulent.
But collectively, they reveal something more critical, which is a breakdown in process discipline. Each manual override, each unchecked exception, and each deviation from defined workflows introduces a point of vulnerability. It is not immediately visible, but consistently exploitable.
Delayed Detection
Time is literally money when it comes to fraud. The longer a fraud takes to get detected, the bigger the loss incurred. Frauds are not usually caught in real time because they take place when a small leak happens, which goes unnoticed. They are caught during reconciliations, audits, after defaults, or when the cash flow collapses suddenly. When an audit goes deeper, and the numbers don’t add up. That is the moment the pattern begins to unravel.
At this stage, recovery becomes constrained, leading to huge losses. This impact is not just monetary; it exposes systemic weaknesses and disrupts business continuity. In fraud, time doesn’t just pass; it rather increases the loss by compounding.
Fraud at Scale
The numbers showcase an alarming story rather than isolated incidents ever could. According to ETBFSI, FY24 witnessed a loss of ₹4,403 crore across 2.8 million cases. By FY25, the total value of bank frauds had almost tripled to ₹36,014 crore, which is nearly three times the previous year’s losses, as reported by Scroll. in. This rise showcases a critical shift that fraud is not just increasing in frequency; it is also increasing in value, especially in large banks. Digital frauds occur at high frequency but involve relatively smaller amounts; lending frauds are far less frequent, however cause more damage, resulting in catastrophic financial exposure. At the same time, fraud has evolved in sophistication. Losses per case are rising, detection is becoming more complex, and recovery rates continue to decline. Fraud today operates with a high level of organization and scale.
According to The Times of India, a single network used over 3,000 mule accounts to layer transactions and obscure money trails. This shows that fraud doesn’t work in isolation; it is driven by an ecosystem that is enabled by gaps in identity verification, compliance frameworks, and internal controls. The risk of fraud is further increasing with the evolution of AI. It is becoming more real, convincing, personalised, and targeted, making it difficult to detect. Most finance teams focus on visible irregularities like small discrepancies, minor errors, and routine noise. While the real threat lies in silent, high-value leakages that go unnoticed until it is too late. Now, this raises an important question…
How are regulators responding to this growing threat?
India is making coordinated efforts to combat financial fraud, in which each regulator is tackling risk at a different level. The Reserve Bank of India or RBI is building system-level defenses that use AI-driven monitoring, shared fraud intelligence, and stricter authentication norms to flag and prevent suspicious transactions in real time.
The National Payments Corporation of India (NPCI) centres on securing high-volume digital payments like UPI with instant alerts before money moves and behavioral risk scoring. The Securities and Exchange Board of India (SEBI) is strengthening investor protection by introducing verified payment identifiers and awareness initiatives to curb investment scams. Together, these regulators are shifting India’s fraud defense from detection to prevention.
How is EnKash changing the dynamics of financial control?
EnKash has been designed to minimize risk at the source. The platform user can define spend limits, allocate role-based access, and automate policy enforcement. This ensures transactions are controlled before they take place. The real-time controls, automation, and intelligence are directly integrated into the financial workflow, which makes it easier for the user to operate.
Payment Controls in Real-Time
With EnKash, transactions are validated before execution. Payments can be restricted based on rules like amount limits, vendor checks, and approval layers. This way, the platform blocks suspicious activity at the source.
Maker-Checker Framework & Role-Based Access
The platform ensures that access is tightly controlled with defined user roles and approval hierarchies. No individual can initiate and approve the same transaction, eliminating insider fraud and unauthorized payments.
Pre-Defined Spend Limits
EnKash has corporate cards and expense policies that come with preset limits and usage rules. This stops overspending, misuse, or transactions outside business intent, especially useful for employee expenses.
Automated Invoice & Expense Validation
With OCR technology and smart checks, EnKash:
- Identifies duplicate invoices
- Flags mismatches
- Highlights irregular claims
This dismisses common leakages caused by manual processing.
Unified Payment Workflows
All payments, including vendor payouts, expenses, and reimbursements, flow through one unified system. There are no scattered approvals across email, WhatsApp, or spreadsheets, which means there are fewer blind spots for fraud.
Real-Time Alerts
Each transaction is continuously monitored with behavioral patterns and anomaly detection. If something looks off, instant alerts are triggered.
Vendor & Beneficiary Validation
The platform verifies the vendor bank details and beneficiary accounts. This helps reduce risks like payments to fake vendors and transfers to changed or compromised bank accounts.
Secure Payment Infrastructure
EnKash uses multi-layered security protocols:
- 2-factor authentication
- Tokenization
- Encrypted transactions
Misuse is restricted with this payment infrastructure, even if the credentials are exposed. “EnKash is built on a simple principle: control transactions before they happen. By embedding checkpoints across our products, we ensure that even high-velocity transactions are governed by validation layers, reducing risk, errors, and fraud.” Hemant Vishnoi, Co-Founder, EnKash
Complete Audit Trails
Every action done for a transaction is logged and traceable. This ensures accountability and makes it easier to investigate.
No Manual Intervention
With the automation of approvals, validations, and reconciliations, EnKash removes human intervention, which is one of the biggest fraud entry points.
As financial systems and technology evolve, so do the methods used to exploit them. The shift is about redefining control. In a world where money moves instantly, control cannot afford to lag. The institutions that have adapted to this shift and designed systems that prevent, not just detect, will redefine the next era of financial trust.
