Costs for Financial Crime are rising and financial institutions in Asia are having to bear them. In February 2018, a large state owned Indian bank was involved in fraudulent transactions of total value exceeding USD 2 BN.
As a direct cause of the market’s reaction to the news, the bank’s shares dropped by almost 40% of its market value in three weeks. This happened due to the lack of adequate controls in the bank, which allowed criminals to work through the loopholes of the system and bribe internal employees to help them implement the fraud. While this has been dubbed as the biggest fraud in India’s banking history, it is by no means an isolated incident in the region. This is an issue that FS institutions all over Asia Pacific should deal with urgently, or the costs may become unwieldy for the industry and society at large.
Marie Stohldreier Associate