Retail banking was identified as the major contributor to fraud incidents with banks
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Mumbai: The number of frauds in the banking sector as well as the level of sophistication of frauds has increased over the last two years as fraudsters are finding newer ways to breach the firewalls put in place by financial institutions. According to the findings of the Deloitte India Banking Fraud Survey, around 93 per cent of the respondents pointed out a substantial rise in fraud incidents, with more than half of the respondents having witnessed more than 10 per cent increase in fraud incidents within their respective institutions.
Retail banking was identified as the major contributor to fraud incidents with banks, on an average experiencing more than 50 fraud incidents annually. The average loss on account stood at Rs 10 lakh per incident. In contrast, the non-retail segment saw an average of 10 fraud incidents with an approximate loss of Rs 2 crore per incident. It pointed out that the top three areas giving sleepless nights to the bankers were internet banking/ATM fraud, e-banking fraud and identity fraud.
“While the banking sector has been amongst the first sectors in India to adopt technology for business expansion and ease, they have not yet leveraged technology to the maximum extent as part of their fraud risk mitigation efforts. This is one of the reason why the sector continues to see a rise in fraud as well as delays in detection and recovery,” said K.V. Karthik, senior director, Deloitte Forensic.
Some of the reason that have been identified for the increase in fraud incidents include lack of oversight by line managers or senior management on deviations from existing processes, business pressures to meet unreasonable targets, lack of tools to identify potential red flags and collusion between employees and external parties.
( Source : dc correspondent )
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