Banking Fraud in India

Banking Fraud have been in existence  from a long time in the form of insider trading, stock manipulation, accounting irregularity etc. But now-a-days the fraud in this sector has become more sophisticated and the Indian banking sector is overwhelmed with more advanced frauds.

There are many other scams prevailing like ID theft, fraudulent documentation and diversion of funds etc., but the leading scam among all of them is Non Performing Assets (NPAs).

This info graphic below reflects increasing percentage of banking fraud in India year after year.



By Priyanka Gautam 

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CustomerXPs offers real-time, intelligent products that empower banks with instant insights enabling influenced outcomes of deeper customer engagement and fraud-free transactions.

Learn more about CustomerXPs Clari5

The carding scene of India is a topic that has been talked about for years. There are many misconceptions about carders and carding in general, but the truth is that carding is not always bad. In this blog post, we will discuss what carding actually means in the country of India, how to understand it better, and what you can do to fight against it.

AML as a Service

AML as a Service

Past few months have seen a lot of activity from regulators, bankers and industry bodies alike towards curbing money laundering. Rules are becoming stringent and reporting more accurate. Then there were hefty fines levied on certain banks for non compliance with AML guidelines.

During our conversation with bankers, it consistently emerged that bankers have AML compliance as one of their top priorities. This is a clear outcome of lot of banks having plugged their technology for AML, leaving the banks which have not yet taken solid steps towards AML exposed to becoming a conduit for money laundering leading to take evasions, balck money and terror financing.

However, a major barrier these banks face is that technology investments are CAPEX which means budgeting for these investments at the beginning of financial year. It also necessitates a longer procurement cycle and boardroom discussions with other departments on redirecting budgets towards AML.

Second barrier is diversion of resources from revenue generation towards maintenance of AML technology, annual licenses,a project management team to monitor the technology and additional costs to incorporate the changing regulatory requirements.

Third barrier is upfront purchase of such technology entrenches the bank with the software vendor, making switching costs very high.

Understanding these concerns of our customers, CustomerXPs has launched Clari5 AML-as-a-Service to help them overcome the above mentioned barriers and provide a safe banking environment.

The first barrier of CAPEX is overcome by changing it to OPEX. This means that banks no longer have to make upfront investment in software, but use the ‘pay as you go’ model of monthly payments. This model of payments is more comfortable to the CIO, CRO and CFO.

Second barrier is taken care by the fact that there is no annual license, no maintenance required by the bank and incorporation of all the additional requirements come as part of the subscription.

Third barrier of entrenching with the software vendor is overcome by the fact that the subscription is monthly which means that banks can switch to other models with all risks covered.

Financial Crime in South Africa!

Financial Crime in South Africa is overwhelmingly omnipresent. According to Christopher Malan, Head of Financial Intelligence Center, South African banks have to work towards being more compliant in combating financial crime i.e. Terrorism Financing and Money Laundering.

Four big banks of South Africa were fined for R125 million by the Reserve Bank for failing being compliant to the regulations. Banks are highly criticized for forming cartels, and behaving monopolistically in the African region. This is one of the various reasons for high financial crime rate in South Africa.

According to PWC report, the biggest thieves are not the lowest paid or least educated but was quite opposite. The senior management are the main perpetrators in South Africa. The fraudsters are mainly in their thirties with University degrees.

The most common scams prevailing in South Africa are internal fraud, money laundering, e-mail scams, identity theft, remittance scams, bribing and corruption, and misappropriation of assets. The leading scam among all the above list is the internal fraud. This revelations by PWC has built a cloud of uncertainty and mistrust inside the organisation. This has  shattered the trust of customers on the financial organization.

Financial crime in South Africa has taken its toll on the lives of people. It has directly or indirectly affected the livelihood of people. Frauds and Scams have robbed people of their resources. It has drained the funds available for country’s development. By knowing what to look out for, one can avoid falling victim to common fraud and scams. Hence, the following infographics will give an overview of different prevailing scams in South Africa. I hope you find it useful.




Financial Fraud in Australia

Financial Fraud in Australia

Financial fraud is pervasive. Not only developing but developed countries grapple with fraud. With new channels of financial transactions opening up for consumers, it is becoming even more difficult to monitor fraudulent events in real-time. For instance, online banking & payment cards have become so ubiquitous that we cannot imagine transacting without them in our day-to-day life. On the other hand, banks are threatened by high levels of fraud that are associated with electronic transactions. In Australia, the total amount of money spent on payment cards was AUD 624 Billion in 2013. At the same time, an estimated AUD 1.4 Billion was lost to personal fraud that has emerged as the largest form of financial fraud in Australia.

This infographic below delves deeper into the fraud scenario in Australia and highlights ways to combat fraud in real-time.


Fraud Landscape In Africa – The Pervasiveness of Online Fraud

Fraud Landscape in Africa

Financial Fraud has perpetrated the banking industry in big way. As more people use the Internet for their banking needs, the number of fraudsters eyeing online financial transactions has also multiplied. In Africa particularly , online fraud has proved to be one of the most pervasive forms of financial fraud and is hugely impacting the fraud landscape.

 This infographic below details out the fraud landscape in Africa and how use of innovative anti-fraud technology mitigates & prevents frauds from taking place in real-time.

Types of Fraud in Banking

Types of Fraud in Banking:

Fraud is an escalating threat for banks. Technological advancements and changing customer preferences have opened up new avenues of banking for modern consumers. But these channels of convenience have also attracted massive threat from fraudsters.  For instance, 41% of customers globally who have been victims of financial cyber fraud have failed to get even a single cent back. Fraudsters have not only perpetrated direct channels but have also gained entry within the banking system as insiders.

The following infographic throws light on the different types of fraud in banking and how use of innovative real-time anti-fraud technology mitigates & prevents bank frauds from taking place.


Continued Commitment to Fight Banking Fraud

Gartner recently published a report on Banking Vertical specific software. According to the report, the banking and securities vertical specific software market grew by 5.9%, riding on replacement of legacy applications in mature markets and new technology investments i emerging markets.

CustomerXPs features in the report as a notable vendor providing banking software. With our Clari5 suite of products, we continue to focus on Enterprise Fraud Management and Customer Experience Management for Banks. Inclusion in the report is confirmation of our focus and belief.

Around same time, Gartner published Market Guide for Online Fraud Detection. This guide provides recommendations to fraud managers for their strategic planning in using technology to combat Online Fraud. In this report too, CustomerXPs is mentioned as a Representative vendor. This inclusion is also a testament to credibility of CustomerXPs as a provider of software to fight banking fraud.

As I have written in an earlier post, there is a sense of satisfaction in receiving the positive feedback from the industry analysts and customers alike, a motivation to continue on the journey we have embarked and to keep committed to our goal of helping customers bank in a fraud free environment.

Changing the Indian Banking Fraud Landscape with Real-time Fraud Prevention Technology

Banking fraud is a $3.5 Trillion global menace. Indian Banking Fraud number instances have increased considerably over the past few years. This surge in banking fraud has not only resulted in banks losing millions but also sustaining irreparable reputational damage. With such attacks becoming more frequent, RBI has mandated banks to comply with recommended measures to secure the technology infrastructure and improve fraud risk management practices for frauds across channels. There is thus a growing need for banks to incorporate strong combat mechanism for not only detecting but preventing frauds in real-time.

The infographic below highlights recent trends in the Indian Banking fraud landscape and how implementing real-time fraud management technology would combat such frauds in a fool-proof way.


Online Banking- A blessing or a threat in disguise?

Online Banking- A blessing or a threat in disguise?:

E-banking, or online banking as we call it, has become an accepted norm of financial transactions for millions around the world. The pervasiveness of internet has contributed to this channel of banking gaining prominence not only in developed countries but also in the developing ones.  The modern banking customer who is short on time does not hesitate to log on to her online banking account and make payments online or transfer money, much to her relief.  Aren’t we lucky enough to experience such luxury at the hands of technology?

Well, pause for a second. The growing menace of fraud has posed a big threat to the safety of these banking transactions. Identity theft, phishing & smishing (phishing through mobile phones) are the most common fraud practices threatening the online banking space. According to a report published by Kaspersky in 2013, online fraud is costing the global economy many times more than initial estimates of USD 100bn a year, with bank fraud contributing the maximum. Also with the emergence of various social media channels, fraudsters have upped their ante. As per a research by Microsoft, phishing via social networks was used in 84% of the total attacks carried out in 2011. Such attacks not only expose gaps in the online banking ecosystem but also pose a grave challenge for banks- in how to establish a counter-attack mechanism.

Banks must incorporate a strong combat mechanism- that cannot be achieved by simply following an outside-in defense approach that is reactive in nature. What banks need is an inside-out approach to fraud prevention using customer behavioral intelligence. Customer behavioral intelligence not only makes use of financial transaction patterns but also non-financial transaction patterns, user login patterns and device usage patterns to come out with fraud-risk advice.  This includes using 2-factor authentication to restrict the fraudster from making unauthorized access into the customer’s online banking account, as mandated by Reserve Bank of India, recently.  This fraud-risk advice being available in real-time empowers the banking system to allow, decline or challenge suspicious transactions thereby preventing the internet banking fraud from actually taking place.

Thus, implementing strong online fraud prevention technology is essential not only for making internet banking transactions fraud-proof for customers but also enjoyable. A good fraud prevention solution can not only benefit the bank in terms of improved customer loyalty but also help the bank improve its bottom-line.