What are the latest trends in banking fraud, and how are CFEs adapting to these challenges?

The evolving digitisation in the coming years is making a turning point for the banking and financial services sectors. Now the success as well as relevance of the banking sector will depend on adapting to change and developing cutting-edge risk management techniques. For banks to prosper in this changing environment, they must comprehend the latest trends and make the necessary adjustments, including deploying CFEs as their frontier forces of fraud identification, investigation and deterrence to meet the difficulties. 

Latest Trends in Banking Fraud

• Phishing Scams: Fraudsters may pose as your bank representative in an email or text message while using this kind of online scam. The notice will frequently request that you take quick action, such as verifying your information to prevent the account from being terminated.  Perhaps even a link to the bank is included in the letter, but it leads to a fake website that impersonates the bank’s website. The con artists log your account information when you input it.  Sometimes, the email asks you to phone a false customer service number. If you do, you will be contacted by someone who will attempt to obtain private information from you, such as your date of birth.

• Technical Support Scam: Scammers may pose as representatives of a reputable tech company to persuade you that there are actually issues with your computer, they employ a lot of technical jargon. They might urge you to access certain files or do a computer scan, after which they might claim there is an issue even though there isn’t. Requesting remote access to your computer will enable them to view all sensitive banking data stored on it as well as on any network that is connected to it. They might also install malware which grants them access to your computer and private information, such as passwords and user names. 

• Investment Scams: In investment fraud, fraudsters persuade victims to part with their money for supposedly “amazing” prospects from their banks. They might utilise deceptive information or coercive methods to convince the victim to give over their money, promising large profits with minimal risk. These kinds of frauds have been known to thrive in the cryptocurrency market since there is less oversight there, which makes room for fraud.

How CFEs are adapting to increasing fraud-risk landscape challenges in the banking sector?

The primary objective of a certified fraud examiner is to stop, identify, and/or discourage fraud in banks. To determine if there is enough evidence to suspect fraud has occurred or may be occurring in a business, a CFE may be consulted or hired in the bank as a fraud investigator or an auditor. A CFE may also be hired in response to pending litigation or before it is expected to occur. A certified fraud examiner’s duties may include analysing financial records, auditing internal controls, speaking with witnesses and obtaining statements, gathering and reviewing evidence, creating reports, testifying in court, and much more.

CFEs are trained to identify warning signs in financial statements and internal controls, which can prevent fraud before it begins and save your company thousands of dollars. CFEs can offer significant expertise in developing and putting into place robust internal controls to safeguard the bank’s finances, sensitive information as well as reputation. A CFE can also assist banks in navigating the legal system, settlement negotiations, and police enforcement’s involvement when the fraud is perpetrated.