Knowledge management to prevent fraudulent e-banding transactions

Rachel Barker

doi:10.18820/24150525/comm.v23.5

Abstract

The growth of e-banking as financial institutions encourage customers to do online banking transactions opened opportunities for criminals and sophisticated fraudsters to perpetrate and abuse customers in their social, cyber and physical worlds. This emphasises the need for communication and knowledge sharing by the financial service industry to empower customers in identifying dynamic fraud from genuine customer behaviour. The boundary of liability with respect to fraudulent e-banking transactions is shifting from the banking industry to the customer, with the emphasis on concepts like co-liability. Despite continuous efforts by the financial industry to increase customer awareness, the dominating lack of clarity about when clients have acted negligently has become problematic, which can lead to loss of customer trust and a demand for better security. This article addresses the lack of research on this through a critical analysis of knowledge management to enhance security and customer trust in e-banking. The study investigates fraud prevention and available e-security measures, the legal consequences on co-liability to negate these potential negative consequences to the benefit of both the financial industry and the customer, and proposes a conceptual theoretical framework for e-banking fraud prevention and co-liability through proactive communication.

Highlights

The following quote by Hoffman and Birnbrich (2012: 390) sets the scene for this research to develop a conceptual framework for fraud prevention in e-banking: “As banking fraud might affect customer relationship quality and customer loyalty, fraud prevention and its effective communication is an important topic for academic research”
Because the purpose of this study is to examine the need to enhance security and customer trust in e-banking, the focus will be on security measures, proactive communication on possible risks of fraudulent transactions and how to educate customers through knowledge sharing on fraud prevention and the consequences of neglect
The focus in this conceptual framework is on fraud prevention using the three typologies of knowledge management to communicate with customers proactively

Summary

INTRODUCTION

The following quote by Hoffman and Birnbrich (2012: 390) sets the scene for this research to develop a conceptual framework for fraud prevention in e-banking: “As banking fraud might affect customer relationship quality and customer loyalty, fraud prevention and its effective communication is an important topic for academic research”. The potential negative consequences for both the customer and bank indicated in Table 1 are prevalent if customers are held liable for internet banking usage in general and fraudulent e-banking transactions (Van der Meulen 2013; Hoffman & Birnbrich 2012; Tassabehji & Kamala 2012; Yazdanifard et al 2011; Jansen & Leukfeldt 2015; Chiou & Shen 2012) These concepts can typically be viewed in terms of three notable influences of the online environment on communication, namely, time and space compression, global consciousness and reflexivity, and disembeddedness in single locations (Monge 1999). The problem should be treated less simplistically by the banks and it ought to be a requirement to inform customers that their accounts have been compromised

A CONCEPTUAL THEORETICAL FRAMEWORK FOR FRAUDULENT E-BANKING TRANSACTIONS

CONCLUSION