India Banking Fraud Survey - 2012
Navigating the challenging environment
The Indian banking and financial services sector has witnessed exponential growth in the last decade. This growth has not been without its pitfalls as incidents of fraud in the industry have also been on the rise.
Deloitte’s fraud survey shows that banks have witnessed a rise in the number of fraud incidents in the last one year, and the trend is likely to continue in the near future. The survey points to the increased difficult scenario for banks with increased fraud incidents and low recoveries, thereby directly affecting their bottom-line. With increased regulatory scrutiny, banks are under increased pressure to implement best practices and fraud risk management framework. However, as indicated from the survey, this still appears to be work in progress in many of the organizations.
Risks are inherent in the banking business. In today’s economic climate, the adage “prevention is better than cure” has never been more accurate. No organization can be completely immune to fraudulent activity, but steps can be taken to reduce the exposure to financial loss and reputational damage, which are common consequences of fraud. Deloitte’s fraud survey for the banking industry was aimed at gaining an insight into the fraud scenario in the industry, the areas that incur the maximum number of fraud incidents, and the measures organizations are taking to fight the menace.
The survey questionnaire was sent out in November 2011 to leading banks in India. The respondents included Chief Risk Officers, Chief Compliance Officers, Heads of internal audit and other senior management personnel. We would like to take this opportunity to thank the people and organizations who have taken time to share their views about the impact of fraud in their respective organisations. Our gratitude to the executives and their respective banks as the survey would not have been possible without their support.
We hope you will find the report insightful and informative.