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Banking Frauds on the Rise: Depositor’s Money at Risk of Theft

November 21, 2017



Cloning of both debit and credit cards is considered to be the most common type of fraud; this is followed by virtual frauds that include online shopping (e-commerce frauds). Furthermore, banks are making millions of dollars in losses due to fraudulent transactions that involve ATMs. For instance, a bank in South Africa became the victim of a bank heist after criminals stole 13 million dollars out of ATMs on another continent by using fake South African credit cards. The fraudsters used approximately 1,600 forged cards to withdraw money from 1,400 individual ATMs across Japan.1



However, such fraudsters also work in banks; there are many cases in which banks and financial institutions employees have embezzled money from their employers for personal gain. A survey found that 72 percent of all financial institutions admitted that they had experienced theft cases by one of their employees.2 At the same time, most banks fail to talk about the insider threat problem and choose to remain in denial. Almost 70 percent of all financial institutions admit that their full time employees have a high probability of committing insider fraud.3 Furthermore, the technology workers are also ranked top in the job categories that commit financial fraud.

According to the Deloitte 2013 Financial Crime Survey, Kampala has experienced a significant increase in fraud cases within the region because financial institutions have failed to incorporate high-tech controls that are compatible with the innovative products in the market. Uganda apparently loses between 1 million and 10 million dollars per year to fraud; Tanzania and Kenya lose over 10 million dollars annually.4



Prevention of Fraud through Technology


Even though financial institutions have incorporated advanced technology in their services, they still need to do a lot more to protect their investments and their clients against fraud risks. They need to enhance their security systems by making it more difficult for fraudsters to attain depositor’s money.

Fraud practices do not just present the financial institutions with the risk of losing revenue, but, it also affects the bank clients. The banking industry has to be more aware of fraud and its potential for growth; Ntellicheck Reconciliation Solution is an effective tool that can be used to minimize this risk. This tool is necessary because the financial services industry needs to place stronger security controls to deal with the increasing fraud practices in Africa.


Ntellicheck Reconciliation Solution ensures:

•             Real-time matching and automation

•             Integration with existing infrastructure

•             Reports based on the reconciliation status for audit purposes

•             Provision of manual reconciliation for unmatched items

•             Review and reversal of matched transactions should incorrect references be made

•             Allows reconciliations to be created for multiple banks, companies and environments

•             Multi-currency, multi-site solution deployable on multiple environments

•             Direct uploading of files not available to users in csv format

•             Built in email function to facilitate communication and notification

•             Configurable access rights to enhance security.


Not only will financial institutions have the ability to detect fraud activities both internally and externally, but, they will also protect their investments and the trust of their clients.


  1. http://money.cnn.com/2016/05/23/news/bank-fraud-south-africa-japan/index.html

  2. https://news.slashdot.org/story/09/10/05/2251233/72-of-banks-say-their-employees-committed-fraud

  3. https://news.slashdot.org/story/09/10/05/2251233/72-of-banks-say-their-employees-committed-fraud

  4. https://docs.apwg.org/reports/F&S%20-%20Easy%20Solutions%20Consumer%20research%20ENGLISH%20-%20oct2010.pdf



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