These frauds have been detected across sectors, but they are higher in trading- and commodity-based companies.
Instances of banking frauds have increased 20 percent in the past two years despite the recent crackdown, Deloitte Touche Tohmatsu India said in its annual banking fraud survey to be released on November 26.
“While there has been a growing awareness among banks to enhance their fraud risk management framework in response to regulatory directives and/or rising incidents of fraud, there is a clear need for banks to integrate a larger financial crime compliance agenda that will work across the compliance, legal, credit and operations department,” the Mint report stated, quoting Deloitte.
KV Karthik, Partner and Financial Services Lead, Forensic Financial Advisory, Deloitte, told the paper that the rise is due to ineffectiveness to curb such instances and detection is still to become proactive.
The growth of technology and digital channels, according to Deloitte, have made fraud detection more difficult and most banks lack the forensic analytics tools needed to predict frauds.
In the past two years, the cost of anti-fraud measures has substantially risen, with one estimate pegging the increase for banks by at least 10-12 percent year, a forensic analyst told the paper.As per the report, these frauds have been detected across sectors, but they are higher in trading- and commodity-based companies. “It is difficult to assess the real value of assets and liabilities in companies which are mostly trading companies and are into commodities trading,” the forensic analyst added.