A structured review and theme analysis of financial frauds in the banking industry
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A structured review and theme analysis of financial frauds in the banking industry Pallavi Sood 1,2 & Puneet Bhushan 1 Received: 29 February 2020 / Accepted: 28 September 2020/ # Springer Nature B.V. 2020
Abstract Organizations of all types are vulnerable to frauds. Banks contribute to a significant extent in a country’s economic development by generating a large part of revenue in the service sector. Deterrence of fraud is impossible without understanding it. The present study attempts to extract themes by highlighting the major areas of the bank fraud literature within a specific time frame of 2000–2019 and finding the research gaps citing the future scope for research. Post the review of existing literature, using thematic analysis, two major themes were observed by the author, namely, “regulatory and compliance”–based studies and studies related to the “socio psychological” aspect of the literature. An examination of themes indicated that the popularity of the research areas shifted from accounting frauds or balance sheet frauds in early 2000s to areas such as cyber frauds and identity theft at the later decade. The present study paves way forward for future research on the bank customer’s vigilance, experiences and perspectives on frauds. Other significant areas of research include coping mechanisms with the various challenges faced by banks in marketing themselves after any major fraud occurrence. Keywords Frauds . Thematic analysis . Banking institutions . Research gaps . Regulatory
and compliance . Sociopsychological
Introduction Financial frauds are at their peak in present times and have come centre-stage on the economic agenda. This is due to outburst of many large value frauds which derailed the
* Pallavi Sood [email protected]
1
University Business School, Himachal Pradesh University, Shimla, India
2
Chitkara Business School, Chitkara University, Punjab, India
Sood P., Bhushan P.
financial health and reputation of banks and the economy (Gupta and Gupta, 2015). Fraud is defined by Cambridge Dictionary as anything or any act with the intent of deceiving others, by unjustifiably claiming or being credited with accomplishments (Alleyne et al., 2010). Frauds in the banking sector have always been one of the key concerns for the governments all across the globe (Kaveri, 2014). While the banks always try to improve their fraud risk management framework in response to regulatory directives and/or rising incidents of fraud, it is quite evident that there is a dire need to integrate a larger financial crime compliance agenda working across a wider arena (Ghosh & Bagheri, 2006). The thought-provoking questions still remain intact such as are regulators doing enough? Is the internal control framework effective? What are the major challenges faced by the banks to detect and prevent frauds? Are banks aware of the possible new fraud arenas? Do the banks have necessary capability to identify “red flags” proactively? (Khanna & Arora, 2009). The last decade involved a significant coverage of banking frauds b
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