Involvement of bankers in digital fraudulence


FE Team | Published: November 20, 2017 09:18:14 | Updated: November 21, 2017 22:06:38


Involvement of bankers in digital fraudulence

The recent research finding that bankers and IT (information technology) professionals are involved in more than half of the fraudulent practices detected in the alternative delivery channel (ADC) of commercial banks would, surely, cause further damage to an already-eroding image of the country's banking industry. The ADC refers to a host of facilities that form a digital platform and makes the cashless transactions a reality, replacing the traditional physical transactions. The cashless transaction is an integral as well as essential part of the present-day banking. Bangladesh is also no exception. The banking industry here has been embracing the digital transaction system which is fast, efficient and cost-effective.

Mobile financial services are the most dominant of the digital channels and a large number of customers do avail those for their own convenience. Nearly 18 per cent of the banking transactions are done using the plastics now. However, compared to many other developing countries, the use of ATM (automated teller machines) and internet for banking transactions is still low in Bangladesh. Yet the use of ADCs has been rising notably in recent years with banks expanding their online network and installing more and more ATM booths across the country. It is not possible for any of the banks to stay away from this otherwise unavoidable transformation and go on with their normal business operations. If any bank decides to go slow as far as digitizing is concerned its business is bound to be affected. Thus, despite relative low participation in digitization, the total volume of transactions through the ADCs in the country stood more than Tk. 3157 billion in 2016.

The banks would naturally prefer transactions through ADCs, for those cost them less. For instance, a single mobile transaction costs the banks only Tk. 1.75, while each of the physical transactions through bank branches, on an average, costs Tk. 144. Banks, thus, would prefer to go digital for saving costs and their clients for the sake of convenience. But if fraudulent practices come in the way with greater involvement of bankers and banks' IT professionals, all stakeholders in the banking industry have reasons to be worried.

It is natural that some cyber criminals, popularly known as hackers, would try to steal money through digital transactions. But if the banks' own personnel work hands in glove with the criminals, the situation turns out to be grave. The stealing of the Bangladesh Bank's money from the New York branch of the US Federal Reserve, one of the largest digital bank heists in history, is a case in point. It is widely suspected on some perceived grounds that some insiders were involved in the hacking by the international hackers. But the deliberate delay in redeeming earlier promise by the authorities concerned about publishing the report of the probe body, formed by the government soon after the siphoning off the BB fund, has lent strength to the suspicion.

The results of another BIBM survey unveiled some months back had showed that more than half of the country's banks ran the risk of information management security breaches. Of the banks surveyed under study, 36 per cent were found in high and 32 per cent in moderate risk of losing information at any moment. So, it is important to ensure honesty and integrity of the banks' own workforce, including their IT experts. In addition, the banks should invest more in building both hardware and software firewalls to prevent any information-related security breaches.

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