78% bankers see frauds rising in 2 years: Survey

Around 78% of bankers expect fraud to increase over the next two years because of the current business disruption due to the pandemic. The fear of fraud is triggered by the reduction in human contact due to large-scale remote working and an increase in customers using non-banking channels for transactions.

According to the Indian Banking Fraud Survey released by Deloitte, the most common concern for bankers is loan fraud (24%) followed by fraud in internet & mobile banking (14%). Respondents cited limited monitoring of assets after disbursement (38%), the economic slowdown (24%) and insufficient due diligence prior to disbursement (21%) as the top three factors leading to higher problem loans. These suggest that banks may need to overhaul their due diligence and monitoring frameworks.

“The number of fraud incidents encountered by banks over the last two years appears to have increased, compared with the findings of our previous survey. Around 53% of respondents indicated that they have faced more than 100 fraud incidents in retail banking (over the last two years) — a 29% increase since the previous edition,” the report said.

According to the report, bankers said they have managed to detect fraud largely during routine audit and reconciliation followed by proactive measures through internal automated data analysis or transaction monitoring software.