Digital Banking Fraud in India: Typologies, Victim Behaviour, and AI-Enabled Risk Governance in a Global Context

The rapid expansion of digital financial services in India, including Unified Payments Interface (UPI), mobile wallets, and internet banking, has significantly enhanced financial inclusion and convenience. However, this digital transformation has simultaneously created new vulnerabilities for fraudsters to exploit. This study synthesizes insights from global and Indian literature, case reports, and regulatory documents to examine the typologies of digital banking fraud, patterns of victim behaviour, institutional responses, and the potential of artificial intelligence (AI) driven detection mechanisms. Drawing upon Reserve Bank of India (RBI) Ombudsman reports, the National Electronic Fraud Forum (NeFF), international case studies from Zimbabwe, the European Union, and Saudi Arabia, as well as criminological perspectives, the paper develops a holistic framework for understanding and combating digital fraud in India. Findings indicate that phishing, vishing, SIM swap, QR/UPI scams, ATM skimming, and Ponzi schemes remain dominant, with social engineering as a critical enabler. Victim susceptibility stems from trust in authority, urgency appeals, and low digital literacy, particularly among rural and elderly populations. Despite RBI initiatives such as the BE(A)WARE campaign and regulatory enhancements, significant challenges remain, including underreporting, fragmented detection systems, and cross-border fraud networks using the dark web and cryptocurrencies. The paper recommends multi-stakeholder strategies: AI-enabled fraud monitoring platforms, unified reporting mechanisms, consumer digital literacy programs, and international collaboration for cybercrime intelligence. The study concludes that India’s success in balancing financial inclusion with cyber resilience will depend on integrating technology, regulation, and behavioural insights.