Financial Crimes: Definition, Techniques and Certifications
Banks are the backbone of the economy. They drive the operations of the financial sector, money market as well as economic growth. Globally, financial criminals have been targeting the banks to optimize their illegal gains.
Criminals use innovative techniques to carry out financial crimes in Banking Sector. Banking Industry is not 100% secured against such threats. There is a certain level of preparedness in associating with the fraud risk that takes place in the banks as a whole.
There are different ways to control these Fin-crimes. One can educate and train the citizens about fraud prevention, make the laws and regulations stringent, follow fraud mitigation and Fraud Prevention practices to curb down the financial crimes in the banking sector. But to understand Financial Crimes in Banking Sector let us first go through the definition of Financial Crime.
Definition of Financial Crime
According to a globally accepted definition, it is crime that generates the benefit illicitly or preserves the illicit benefit already generated and obtained. It includes fraud (cheque fraud, credit card fraud, mortgage fraud, medical fraud, corporate fraud, securities fraud (including insider trading), bank fraud, insurance fraud, market manipulation, payment (point of sale) fraud, health care fraud); theft; scams or confidence tricks; tax evasion; bribery; sedition; embezzlement; identity theft; money laundering; and forgery and counterfeiting, including the production of counterfeit money and consumer goods.
Financial Crimes in Banking Sector
A Financial Crime in the Banking sector (Banking Fraud) can be defined as potentially using illegal means to obtain money, assets, the property owned by any financial institution, by obtaining money from the depositor and fraudulently posing as any bank or financial institute. Banking fraud is regarded as a criminal offence in India. In the case of legal purposes, credit unions and banks are also included that are federally insured. This includes Federal Reserve banks, the Federal Deposit Insurance Corporation (FDIC), mortgage lending agencies, and other institutions that accept deposits of money or other financial assets. Bank frauds are involved basically to defraud the financial institution. From a simple cheque fraud to credit card skimming, it has a wide range.
Reserve bank of India defines banking fraud as an act of commission and/or abatement, which is intended to cause illicit gain to one person(s), entity and wrongful loss to the other, either by way of concealment of facts by deceit or by playing a confidence trick.
Adverse Effects of Banking Fraud
There are various instances of fraudulent act happening in banks on consistent basis that go overlooked & inconspicuous. Monetary loss and damage to the reputation & goodwill of the bank are most direct impact of frauds. Serious aberration & misapplication resulted into fraud will definitely raise question over tenability & utility of secured technological capabilities of the institution and their traditional method of protection.
Fraudulent activity will also subvert the profit & overall efficiency of banking services. It can corrode the productivity and adversely affect the interest of investor resulting into unexpected increase in operational & capital risk of the bank. Even, the extent of default in lending process has become so serious that it overburdened the securitization company. Because of the adverse effects of banking frauds in our country, it destroys the economy of the nation as well as its sovereignty.
Financial Crimes Certification in India
Certified Bank Forensic Accountant is a very unique certification that offers a number of benefits to the aspirants. The Certified Bank Forensic Accountant Program is administered by Indiaforensic and is presented by Riskpro Learning is regarded as a premier certification in the Financial Crimes domain. This program is designed by CA Mayur Joshi. The program's standards are set to become skilled in the field of forensic accounting and Bank Fraud Investigations.
The title of Certified Bank Forensic Accountant will be awarded to the aspirants who will clear the examination with flying colors. Hence, this course is an exhaustive course which will cover all the aspects from start to end process in Bank Fraud Investigation. Kindly click here to know more about CBFA.
Originally published at https://www.regtechtimes.com on July 3, 2020.
