Analysis of risk of fraud by the employees in nationalized banks

In the present study, an attempt is made to study the various aspects of risk of fraud by the employees in e-banking in the selected nationalized banks. A sample of 200 respondents (banks’ officials) is taken on the basis of judgement sampling. The primary data were collected with the help of pre-tested structured questionnaire on five point Likert scale i.e. Strongly Agree (SA), Agree (A), Neutral (N), Disagree (D) and Strongly Disagree (SD). The collected data were analyzed through various descriptive and inferential statistical techniques like percentage, mean and standard deviation, etc. Further, ANOVA technique was used to test the hypotheses and validate the results. It is found that poor security of records, hardware and software system is ranked as the most significant factor responsible for risk fraud by the employees in ANDRA, DENA, OBC, PNB, and little fear of exposure and likelihood of detection of frauds in SYNDI. Further, increase in complaints of the customers is ranked as the most significant impact of risk of fraud by the employees in case of ANDRA, increase in costs associated with reimbursing customers’ losses in DENA, OBC, SYNDI and increase in costs associated with regeneration of customers’ records in PNB. On the other hand, developing policies for adequate screening of new employees is ranked as the most significant measure in ANDRA, DENA and OBC, clear boundaries between acceptable and unacceptable behaviour of employees in PNB and assessing the relative likelihood of potential significance of inherent fraud risk in SYNDI. It is recommended that there should be an open-door policy to give employees an open line of communication with management. Internal control programmes should be monitored and revised regularly to ensure that they are effective and current with technological advances. Certified Fraud Examiners (CFE) and Certified Public Accountants (CPAs) should be hired to analyze the company's existing policies and procedures, and recommend appropriate anti-fraud policies and procedures. In addition to prevention strategies, there should also be detection methods in place and make them visible to the employees. Every employee of the organization should be aware of the fraud risk policy including the types of fraud and the consequences associated with them.