An Investigation of Challenges Faced in Detecting Frauds

Bank fraud is a worldwide phenomenon that saves no establishment and not even the economy. It is essential for banks to establish effective system to prevent and detect frauds so as to decrease the chances of frauds to take place. It is important to stop the fraud from happening in the first place. The detection of fraud comes after prevention as it includes recognizing fraud as fast as possible once it has been committed. The purpose of the study is to know the challenges faced by banks in detecting frauds. The data were collected through questionnaire filled from 120 bank staff, categorised into managers and officers, of Bank of India (BOI), Bank of Baroda (BOB), Axis Bank (AXIS) and ICICI Bank (ICICI) in the area of NCR. The collected data were analyzed with the help of various descriptive statistics like frequency distribution, mean, standard deviation, etc. To check the validity of the results and test the research hypotheses, t-test and Analysis of Variance (ANOVA) techniques were used. The results show that lack of customer alertness, non-submission of reports by the customers and non-sharing of information with others are the main challenges faced by banks in detecting frauds. To overcome the challenges of frauds, it is recommended that banks must be strict in verifying the reports being submitted by the customers and report the frauds to the concerned authority as and when occurred. There must be timely completion of internal and external audits at branch level.