Factors Affecting Detection and Prevention of Financial Fraud in Banks

Abstract

Banks globally have a dire need for a more systematic and structured fraud risk management framework. In an emerging economy like India, the number of frauds discovered over the years continues to pose challenges towards creating effective fraud mitigating strategies. The study examines factors affecting fraud detection, prevention, and response to various types of financial frauds in Indian banks. A total of seven factors were extracted out of 34 items, with respect to the bank employees' perception on fraud detection, prevention, and response. After further examination of the factors, significant difference was found in the perception of challenges faced in fraud detection, prevention, and response within varied categories. The study can prove to be a foundation for gaining insights from banking stakeholders who encounter fraudulent incidents.