Bank fraud cases are rife: four pillars of mitigation

bank fraud

Bank fraud cases are rife: four pillars of mitigation

bank fraudThe public’s attention has recently been drawn to a case of bank fraud in the form of embezzlement. The case was regarding the loss of a number of customers’ deposits in a private bank in Bali. This case began to unfold last February, and the number of victims has increased. The amount of loss is currently estimated at around Rp 56 billion with the number of victims totaling to 14 customers.

Bank fraud modes

Such fraud is usually carried out by several unscrupulous bank employees cooperating with each other. According to the Chief Executive of OJK Banking Supervision Heru Kristiyana as quoted from (8/11/2020), fraud that occurs in banking is increasingly difficult to detect when bank personnel cooperate with customers so that the layered security that has been implemented by banks can be breached.

The impact of fraud is very detrimental from the customer’s side and the bank itself. Fraud has caused 112 BPRs to go bankrupt since 2005. According to the member of the Board of Commissioners of the Deposit Insurance Corporation (LPS), Didik Madiyono, as quoted from (15/6/2021), the fraud was carried out by certain individuals through various modes. According to him, fictitious credit and unilateral disbursement of funds are the most dominant modes.

Mitigation efforts

The existence of strict regulations and good governance by banks can minimize the possibility of fraud. This effort was pursued by the Financial Services Authority (OJK) by issuing POJK 39/2019 regarding the implementation of an anti-fraud strategy for commercial banks. Through POJK 39/2019, which has been in effect since January 2020, banks are required to formulate and implement an effective anti-fraud strategy. The formulation and implementation of an anti-fraud strategy contains at least four pillars, namely:

  1. Prevention
  2. Detection,
  3. Investigation, reporting, and sanctions.
  4. Monitoring, evaluation, and follow-up.

Integrity Asia is ready to assist your company in providing and managing required compliance tools to meet good governance and compliance standards, including business investigation services; prevention, detection and investigation. Contact us to learn more about our services.


Also Read:

How the pandemic shapes organizations’ anti-fraud efforts in 2021

Finance and banking industries are the most affected by fraudfraud 

The Indonesian Financial Services Authority (OJK) has enacted anti-fraud regulation for banks


Photo by Eduardo Soares on Unsplash

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