December 24, 2013

Aptivaa was present as the knowledge partner of the conference on “Bank Fraud” organized by Fintelekt in Mumbai on the 18th of December, 2013. The objective of the conference was to identify the causes, concerns and impacts of Frauds in Indian banking sector. The survey also highlighted the challenges Indian banking sector is facing in gaining insights into current scenario on frauds, and fighting fraud. The conference was attended by representatives of several Indian banks, senior RBI officials and leading industry practitioners.

Aptivaa administered a survey on the participants to explore the key drivers, challenges and preparedness of banks to manage and mitigate the risk of Fraud. The respondents of the survey belonged to banks that control around 60% of the Indian banking system and form a representative sample of the industry in terms of ownership (public sector, private sector and foreign owned) and size (large, medium and small).

The survey highlighted several sources of Fraud, key drivers leading to increase in fraud market, issues in managing the Fraud and concerns which needs to be addressed, in order to ensure effectiveness of Fraud Containment methods. While a large number of banks have implemented sophisticated Fraud Management frameworks as part of their fraud detection methods, one-seventh of the respondents still believe that framework in their organization do not have a sophisticated framework for Fraud. A majority of the organizations are already implementing comprehensive assessment of their fraud management framework; yet, around 40% of the respondents believe that there is no such exercise, or are unaware about such practices within their organization. A majority of the respondents are of the opinion that their institution did not consider Analytics as one of the important factors for containment of Fraud and that no banks are currently using advanced capabilities for fraud identification.

The survey also underlined the view of the banks towards the current scenario of the Fraud industry in Indian banking sector and the effectiveness of the measures taken by banks. Some banks are looking at it as a key strategic project and the senior management and board of directors are actively involved. Majority of the respondents felt that the Frauds will continue to rise in current scenario, since the banking industry is vulnerable, and that the increase in incidents could be worrisome.