Fraud Indicators In Banking

The Exposure of Fraud In banking sector will always remain high due to financial products offered by bank, Management always try to focus more in avoidance of fraud, despite of high focus chances of fraud will always be there, Actually management learn the tactics through the past experience and create their internal polices and procedures according to them. So through this article we discuss some Red flags/Indicators of fraud briefly for knowledge purpose, and believe me each one of them may create high reputational as well as financial risk.

Habitual Late Sitting:

Most of the bankers may disagree with that, but as per research Top management always show negative perspective regarding Habitual Late Sitting, the question is why it is included in Fraud Indicator, The answer is why there is a need of Habitual Late Sitting, You have official banking hours to finalize your work. It means you are hiding something from other branch employees and waiting for late hours for finish work which may deals in fraudulent activities.

Password Sharing:

In Banking Password sharing comes under the umbrella of Zero-Tolerance, Management may never think twice to fire/ terminate you if you commit this crime in any stage of your career, Password Sharing in banking is a Red flag because if you are a authorizer in branch and you share your password with your cashier, He / She may post any entry and Supervise the same with your password, in result will be big financial loss/Fraud for bank   

Providing Incomplete Information To H.O/Management:

It is also a Red Flag Indicator of Fraud, because in this employee is concealing the facts from Management, in this way employee is also breaching the trust of employer for his personal financial benefits which leads toward fraud.

Not Availing Mandatory Leaves:

Employees who perform any fraudulent activity will not take mandatory leave, the reason behind this they don't want to leave their table for new comer because when any employee go for annual leave their backup employee will take charge for certain Mandatory leave period, and in this period he/ she can be exposed for the fraud the he commit.  So if any employee never show interest for annual leave this may lead for Fraud Indicator Or Red Flag.

Unreconciled Entry Since Long:

Reconciliation is very important in banking, If Management found any Unreconciled entry in bank suspense GL, This thing may trigger the chances of Fraud Activity, That is the reason Head Office always send reminders to branches to keep Suspense GL Balance and Error Free.

Flying Entry:

Flying entry is very suspicious in banking and it may leads toward the big fraud / Financial loss is not traced timely, Actually Flying Entry is the transaction without any justification or record. So it is also one of the fraud indicator in banking.  

If we focus above Red Flags Fraud Indicator in our career this is for sure that we can make our life easy and save our self from any fraud activity. and for Middle level management it is very good indicators for them to keep their employees on track and guide them accordingly to keep them away from Fraud, and if Found any employee doing above any activity it is their responsibly the report top management/ Senior Management Timely.