Stay a step ahead of fraudsters, banks told

(7/12/2018 8:03:00 AM)

Bankers should stay one step ahead of fraudsters, V N Sethuraman, Executive, Banking Development Department at Central Bank of Oman (CBO), said. He then, enumerated the measures that should be taken to insulate banks from fraudsters as successfully carried out frauds could chip away the confidence of the consumers.

Sethuraman made the remarks in his speech on Fraud Risk Management (FRM) at an event organised by the Oman chapter of Association of Certified Fraud Examiners (ACFE).

The CBO executive said that the need of the hour was to have a system in place that could prevent frauds from taking place, adding that the master circular on FRM issued by CBO offered a stellar framework with regard to the same.

“We thought that the master circular that we (CBO) issued in May, earlier this year would go a long way as a one point letter to address FRM for all licensed financial leasing companies," he said.

“Fraudsters keep re-inventing themselves and changing their modus operandi. So, banks should simultaneously be working to meet these challenges. History has examples where frauds have extinguished banks," he added.

“So, banks and financial institutions should adopt measures such as automated fraud detection techniques, quick follow-ups and customer awareness. Consumers should be informed as to how dangerous it is give out personal information like your debit card pin," Sethuraman said.

“Also, remember, the longer you take to detect the fraud, the more loss, you incur. Besides, banks also need to have a well-defined whistle blower policy and a reward system. You need to have a designated e-mail, phone number as well. If the fraud exceeds a certain limit, then authorities like Royal Oman Police (ROP) need to get involved,” he added.

Simplicity in reporting welcome

Sethuraman agreed that fraud reporting should be made simpler, and added that if we they collected enough information from affiliated banks, then big data would help them predict behaviour of fraudsters. “I think we need to be pro-active, rather than reactive in dealing with banking frauds,” he added.

Tahir bin Salim Al Mamri, the Executive President of CBO, pointed out that banking frauds were not merely operational problems, but rather different issue, altogether.

ACFE President, Davis Kallukaran said that according to a study, there had been 2,690 fraud cases in as many as 125 countries in the past years, adding frauds caused mammoth losses, when looked at cumulatively.

“Experience and training are essential in dealing with frauds. For this, you need trained personnel and specialists and banks need to attract such persons,” he added.

The ACFE is an anti-fraud organisation incorporated in the United States and headquartered in Austin, Texas. The association provides anti-fraud education and training.

Times of Oman