Banks and financial institutions are seeing an upsurge in fraud


According to a Deloitte India report released on Monday, banking and financial institutions have been dealing with a rising number of fraud cases in the wake of COVID-19 and new digital operations.

Large-scale remote working models, an increase in customers using non-branch banking channels, and the limited/ineffective use of forensic analytics tools to identify potential red flags are among the key reasons identified for an increase in fraud incidents over the next two years, according to Deloitte Touche Tohmatsu India LLP (DTTL).

Deloitte said the poll gathered the opinions of 70 key C-suite stakeholders/ senior management from various financial institutions in India who are responsible for compliance and fraud risk management, audit/ finance, and asset recovery. Private, public, international, cooperative, and regional rural banks in India were among the banks and financial organisations in the survey.

“Banking and financial institutions have been struggling to deal with an increasing number of fraud incidents in the wake of COVID-19 and new digital operations,” according to the Deloitte India Banking Fraud Survey. “This trend is expected to continue, with 78 per cent respondents stating that frauds could increase over the next two years.”

According to the study results, retail banking was identified as a critical contributor to fraud occurrences, with 53% of respondents reporting that they had experienced more than 100 fraud episodes (in the previous two years) – a 29% increase from the previous edition.

Similarly, the non-retail group experienced an average of 20 fraud incidences, as reported by 56% of survey respondents – a 22% increase.

“Additionally, data theft, cybercrime, third-party-induced fraud, bribery and corruption, and bogus paperwork have been highlighted as the top five threats,” according to the announcement.

According to survey respondents, the top three outcomes of COVID-19 on their Fraud Risk Management (FRM) function would be a greater reliance on analytical tools for fraud monitoring and detection (25%), the need to raise fraud awareness among customers and employees (23%), and a change in the target operating model to improve remote FRM capabilities (23%). (21 per cent).

Speaking at the unveiling of the survey results Partner, Financial A. KV Karthik, Financial A.. Speaking at the unveiling of the survey results The impact of the epidemic, according to KV Karthik, Partner, Financial Advisory, Deloitte India, has resulted in institutions around the world working in a whole different environment.

“On the one hand, the increased usage of digital channels for client transactions has contributed to transaction convenience and speed. Existing fraud risk management frameworks, on the other hand, have been exposed to more significant and more sophisticated difficulties as a result of growing and complicated business models and increased use of technology, “he stated.

To minimise service delays, Nishkam Ojha, Partner, Deloitte India, believes that the epidemic has compelled banks to make significant organisational and operational adjustments in a short period.

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