Page 26 - NIBAF-Training Matters July - December 2022

Digital Bank Frauds

While the shift of banking to digital
channels is creating lucrative
opportunities for customers it is
also multiplying the routes
available for financial crimes.
Fraudsters increasingly employ
sophisticated tools to exploit
loopholes in systems and
processes, trick customers into
retrieving sensitive information and
frequently collude with corrupt
bank staff to push-up the
institution’s financial liabilities
caused by unauthorized
transactions through exploitation of
these new digital channels.
agencies. He shared details related In order to training relevant team to
to required coordination with LEA handle this new set of challenges,
and incident reporting. Mr. Kamran Programs on Digitization one-day online program on Digital
has 25 years of extensive and Key Risks Bank Frauds was conducted on
experience in Central Banking and September 27, 2022. Mr. Jazil
financial laws at various SBP Over the past few years, financial Mahmood Butt, Sr. Joint Director
regulatory and institutions have been funneling Banking Supervision Department,
supervisory departments, Banking sizeable funds and human SBP apprised the participants from
Mohtasib, and Federal resources into their digital SBP and various commercial banks
Investigation agency. He was also transformation initiatives driven by on the risks related to various types
part of various JITs involved in the need for operational efficiency of frauds through digital channels.
investigation of terrorism cases at and seamless consumer He further discussed sophisticated
Counter Terrorism Department, experiences fraught with an criminal activity, challenges for
KPK. He is currently serving as SBP increasingly competitive business financial services industry, types of
focal person at National AML Desk environment under fintech frauds being perpetrated globally,
FIA. Mr. Kamran shared details on revolution. In line with this trend, local digital fraud incidents, SBP
the role of FIA and FATF’s NIBAF Islamabad launched various instructions and the existing
requirements and compliance. programs to address the capacity controls being implemented to
All the trainers used real scenarios building needs arising out of this mitigate the looming risks.,
of violation, enforcement actions transformation. These courses aim regulatory instructions for reporting
and reporting of incidents and to enable relevant teams to both of frauds , categories digital
near-miss situations faced and develop the technological solutions banking frauds, exploitation of
reported by Exchange Companies for user-friendly services as well as bugs or gaps in systems and
in the area of AML-CFT and Risk to design and appropriately processes by digital fraudsters,
Based Audit and compliance to administer technology-based money laundering and terrorist
elaborate key concepts, processes prevention/control mechanisms. financing through digital banking
and legal/regulatory obligations. A Overview of some important modes, controls employed by
comprehensive case study to courses delivered over the period financial institutions and prescribed
calculate residual r isk of their include: in regulatory instructions and
respective participant’s institutions guidelines, roles and
was also utilized for hand-on
practice on arriving at risk-based
ratings to develop control plans.
Participants appreciated the
material presented as well as
delivery tools utilized by the trainers
and expressed the need for more
trainings in the area.