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Fraud monitoring for banks in India Fraud investigation services India | Fraud risk assessment | Dispute advisory services India | - Ernst & Young - India
Financial institutions today should adopt a proactive, intelligence-led approach to manage fraud risk. Our team can assist you in identifying, assessing and improving fraud monitoring process and system to tackle the unique risks faced by your company.
Buying an off-the-shelf system may not equip the bank with the most effective technical paraphernalia or strategic methods to deal with frauds. Selecting the right framework and a seamless integration of bank systems with the fraud monitoring system is integral to safeguard business and customer interests.
Why is fraud monitoring imperative?
According to RBI-released data, banking-related frauds have doubled in the five-year period between 2004 and 2009.
In 2009, the total number of bank frauds was recorded at 23,914, amounting to a loss of INR18.83 billion, where less than 1% of the fraud cases amounted to INR10 million each or even more.
The last reported count of online fraud cases was 269, amounting to INR590 million.
With acquisitions and expansions spurring the growth in size and customer base, banks are witnessing a substantial rise in the numbers and complexity of fraud scenarios. As such, there is a stringent need for robust monitoring.
The regulator has directed financial institutions to continuously monitor transactions and establish an integrated fraud risk management framework.
There is an increasing need to identify early warning signals to capture frauds close to their occurrence.
A centralized framework can address fraud risks associated with various business units and products and provide insights to stakeholders to take preventive action at the right time.
This also eliminates uncertainty around losses due to fraud and helps the management have a more focused strategy to address fraud-related risks.
What should your company consider while evaluating a “fraud management” strategy?
How well do existing fraud identification and monitoring methods control current and emerging risks and are they commensurate with the size/operations of the organization?
How effective have they been in preventing frauds before/at occurrence?
What is the vision for fraud monitoring in the next five years to overcome challenges?
How responsive are they to new threats and how quickly can they be adapted to detect new fraud patterns?
Do they allow the management to make changes to detection rules without the need for the involvement of IT?
Does it provide a comprehensive MIS for the senior management for oversight and supervisions for the organization as a whole?
