Bankers involved in 67pc of frauds

M Ibrahim Ibne Towhid | Published: 02:20, Nov 17,2017


Bankers have been found involved, directly or indirectly, in 67 per cent of frauds in IT-based banking transactions, showed a study conducted by the Bangladesh Institute of Bank Management.
The study, which analysed 50 cases of frauds taken place in banks, was released in a BIBM workshop on ‘Alternative Delivery Channel: Opportunities and Challenges of the New Banking Environment’ held in Dhaka on Thursday.
It found that general bankers along with banks’ IT professionals and vendors were involved in 67 per cent of the financial frauds committed ‘directly or indirectly’ in banks.
Other people involved in financial frauds at banks are IT professionals, who are alone involved in 11 per cent of cases, vendor or service providers alone in 7 per cent and unauthorised users or customers are involved in the rest 15 per cent of cases.
Banking experts at the workshop said that as banks were going digital and being technology dependent, banks needed less number of employees but were prone to higher risk of fraudsters.
Bangladesh Bank deputy governor and BIBM executive committee chairman Abu Hena Mohd Razee Hassan, BIBM director general Toufic Ahmad Choudhury, senior bank officials of different banks, the research team and faculty members of BIBM were present at the workshop.
While presenting the research paper, BIBM associate professor Md Mahbubur Rahman Alam said technology-based banking frauds involving ATM and plastic cards were highest standing at 43 per cent of the total IT-based frauds.
Other banking fraud compositions include mobile banking with 25 per cent, automated cheque processing system and electronic fund transfer 15 per cent, internet banking 12 per cent, banking application software 3 per cent and SWIFT (a global secured money transfer channel) or others 2 per cent.
Razee Hassan said the banking industry was being able to operate with less number of employees as they were going digital but this was also bringing the threat of technological fraudulences.
He said that with online services the banks were being able to carry out smooth operation with two lakh employees only instead of 10 lakh employees.
Blaming Hundi through mobile financial services for decreasing remittance through the banking channel, he asked bankers to use technology with caution and said that the BB was working to
check the transactions through all the illegal channels.
Bank Asia president and managing director Md Arfan Ali said the banking sector would face huge number of problems in the coming days if the banks were not ready to tackle technological challenges.
NCC Bank senior vice-president Muhammad H Kafi said through their ATM booths across the country banks should give utility services along with other services apart from money transaction as many other IT-based technologies were emerging.
Citing examples of global technological innovation in the financial sector and cashless society, he added that the country’s banks should come with home-grown systems so that in case of emergencies, the banks could solve the problems easily instead of waiting for the arrival of foreign experts.
BIBM professor and former Pubali Bank chief executive officer Helal Ahmed Chowdhury said with the increased use of technology in banks, bankers should be technologically able and IT professionals should also be equally expert in banking.
Otherwise, there will be a crisis and possibility of fraudulence in the banking sector would rise, he added.
After open discussions and panel comments, BB financial inclusion department general manager Md Abul Bashar said the BB gave permission to 18 banks of the country to carry out agent banking operation and they are permitted to provide all sorts of services except foreign currency transaction.
The number of agents increased to 7,10,026 in 2016 from 5,61,189 in 2015 and banks need to be careful so that agents are not involved in fraudulent activities, he said.

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