New Delhi: India’s cyber fraud ecosystem is undergoing a significant transformation, with cybercriminals increasingly abandoning device-hacking techniques in favour of live phone-based manipulation. Instead of relying on malware or remote device takeover, fraudsters are now persuading victims over phone calls to transfer money themselves. At the same time, stolen funds are being rapidly moved and concealed through extensive mule account networks. These findings have been highlighted in the July 2026 Digital Banking Fraud Trends Report published by BioCatch.
According to the report, the total number of attempted cyber fraud sessions declined by 12% between the second half of 2025 and the first half of 2026 compared with the corresponding previous period. However, the value of attempted fraudulent transactions increased by 35%, indicating that cybercriminals are now focusing on fewer but significantly higher-value attacks. The report attributes this shift to the growing use of social engineering rather than sophisticated malware-based intrusions.
The study also notes a decline in the use of Remote Access Trojans (RATs). Detection of such malware fell from 2.5% to 1.7% of fraudulent sessions. In contrast, “active call guidance fraud” has emerged as a rapidly growing tactic. In these schemes, fraudsters remain on the phone with victims and guide them step by step through fund transfers using bank accounts, UPI and other digital payment channels. The share of fraud sessions involving such live calls increased from 3.9% to 4.5%.
Mobile banking has become an increasingly attractive target for cybercriminals. The report found a 67% increase in mobile banking fraud sessions, including an 86% rise on iOS devices and a 35% increase on Android devices, while web-based fraud declined by 10%. SMS-based scams have also surged dramatically, rising by 146%. Fraudsters typically use deceptive text messages to lure victims into phone conversations, where social engineering techniques are employed to obtain banking credentials or persuade them to authorise financial transactions.
According to the Future Crime Research Foundation (FCRF), cybercriminals are now focusing more on exploiting human behaviour than breaking technological defences. Fraud involving fake bank officials, bogus investment advisers, digital arrest scams and callers impersonating government agencies all rely on psychological manipulation rather than technical hacking. The organisation advises people never to transfer money under pressure, fear or promises of quick profits and to independently verify the identity of any caller requesting financial information or payments.
The report describes mule account networks as the backbone of the cyber fraud economy. In 2025, the Central Bureau of Investigation (CBI) identified more than 850,000 mule accounts across over 700 bank branches. Nationwide, 2.65 million mule account cases were linked to cyber fraud complaints involving approximately ₹22,496 crore. Of this amount, nearly ₹9,055 crore was blocked or prevented through intervention mechanisms, while more than 450,000 mule accounts were frozen during the year.
Renowned cybercrime expert and former IPS officer Prof. Triveni Singh said mule accounts have become one of the most critical components of organised cybercrime. Criminal networks recruit account holders through fake job offers, commission-based schemes or rental arrangements, then use those accounts to layer stolen funds across multiple transactions, making it difficult for investigators to trace their origin. He cautioned citizens never to share their bank accounts, ATM cards, cheque books or internet banking credentials with anyone, as doing so could expose them to criminal liability in addition to financial losses.
Cybersecurity experts believe that the combination of social engineering, mobile banking exploitation and organised mule account networks has made cybercrime more sophisticated and dangerous than ever before. They emphasise that stronger coordination among banks, fintech companies, law enforcement agencies and the public, supported by real-time monitoring and widespread cyber awareness, will be essential to counter this rapidly evolving threat.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
