Introduction
For years, fraud detection systems used by banks focused on traditional threats, such as phishing emails, forged documents, or suspicious branch activity. But with UPI and digital banking at the forefront, the fraud game has evolved. Today, UPI breaches are rising fast, especially in institutions lacking adaptive fraud and risk management in banking.
The question arises Why aren’t legacy systems enough? And how can banks respond in the first 48 hours to stay ahead?
This blog breaks it down step by step, so your institution can respond swiftly, strengthen defences, and stay resilient.
48-Hour Crisis Response Plan for UPI Breach in Banks
Emergency Phase: The First 24 Hours
Phase 1: Detect and Activate
This is a critical step. When a UPI breach occurs, banks and financial institutions are alerted through various channels, such as transaction monitoring systems, fraud detection tools, and user complaints. Once the breach is identified, the internal Incident Response Team (IRT) must be activated promptly to manage the situation effectively.
Phase 2: Contain & Assess
Banks must inform their teams to quickly isolate all the affected bank accounts and systems and block all suspicious transactions, irrelevant APIs, compromised credentials, and third-party access points. Protecting the UPI framework requires a focused effort on tightening controls and addressing gaps to avoid recurrence of such incidents.
Collect and preserve technical evidence, such as audit trails, server access logs, API call traces, and user session data, which supports both internal investigation and regulatory compliance.
Phase 3: Notify and escalate
A detailed report about this UPI breach must be immediately escalated by the banks to NPCI (National Payments Corporation of India) as per the reporting protocols and RBI regulations. Following this, securely inform internal stakeholders and executives about the issue. If any Payment Service Providers (PSP) or third-party involvement is identified, they should also be notified accordingly.
Phase 4: Investigate and Validate
In this phase, banks and IRT teams should conduct the thorough investigation to determine the root cause of the UPI breach. This involves analysing transaction patterns, system logs and anomalies to trace how the breach occurred. Identifying the exact cause of the breach helps prevent future incidents.
Common factors can play a huge role in the UPI breach, such as:
- Phishing
- Theft of user credentials
- Weak fraud risk management system in banks
- Security weaknesses in the applications
Response Phase: Next 24 Hours
Phase 5: Remediate & Secure
Following all investigations and evaluations, create a recovery plan to bring the bank back to its secure state after a breach. Integrating intelligent solutions for banking fraud management can be utilised to highlight and remediate any inherently weak areas in the UPI process and reassert a much sturdier multi-factor authentication scheme.
Deploy continuous, real-time fraud detection and AI and ML based monitoring solutions that can detect any fraudulent activities as soon as they occur and automatically report them so that escalation and resolution can be expedited.
Phase 6: Report & Recover
After patching all these risks, banks must reengage with NPCI and RBI to provide a detailed report of this second phase about the mitigation steps and solutions that are created to tone of this issue. The financial institution should make a decision regarding public or customer communication based on the impact.
Equally important is to embrace the learning curve from the breach. The financial institution shall carry out a post-incident analysis to determine any gaps in its operations, delay in response, and control deficiencies. These learnings should then inform revisions to incident response frameworks, refine internal protocols, and train teams accordingly, and turn every breach into a building block of a UPI system that is stronger and more resilient.
BANKiQ FRM: One Solution, Many Defences for Financial Institutions
BANKiQ provides cognitive banking fraud management solutions that prepare banks and other financial institutions to address various aspects of financial crimes, including UPI scams, effectively. With real-time detection, instant anomaly flagging, adaptive behavioural analytics, proactive fraud prevention, and automated FRM and STR (suspicious transactions) reporting, it serves as a trusted guardian for rapid responses, regulatory compliance, and fraud prevention.
Final Note
A UPI breach demands swift, structured action. With a strong 48-hour response plan and a reliable fraud management system in banking, financial institutions can contain threats, ensure compliance, and build long-term resilience.
If you’re still looking to strengthen your fraud risk posture, Connect with the experts at BANKiQ today to respond to UPI breaches and stay ahead of evolving fraud patterns before they escalate.
