A dollar lost keeps the profit away

Authors: Raman Narasimhan, Director, Forensic and Investigative Services
                 Vidya Rajarao, Partner, Forensic and Investigative Services

India’s diversified financial and services sector is undergoing rapid exponential expansion, both in terms of growing financial services and addition of new entities into the market. Innovative disruptive technologies have transformed the banking and financial services. New entrants such as payment banks and mobile wallets have taken the people away from the traditional mode of banking. A new realm of cashless or branchless banking has replaced the conventional modes of banking. Thanks to cloud services, such operations without a physical infrastructure are becoming a reality. However, these changes brought by disruptive innovators, bring with them the amplified need to protect business from risks and frauds.

The relevance

A fast growing economy such as India creates lucrative opportunities and incentives to commit fraud. Instances of money laundering, cybercrime, accounting fraud and asset misappropriation cases are increasing day-by-day. India’s e-commerce market was worth about US $23 bn in 2015. Since 2009 it has witnessed a growth of over 500 percent and is expected to touch a whopping US $38 bn mark by 2016. According to RBI records, an impressive number of about 22 mn bank account holders use mobile banking apps and the volume of mobile banking transactions has risen by 100 percent. In 2014-15, mobile transaction were a whopping US$ 151 bn from the level of approximately US$26 bn recorded in in 2011–12.

The management or controls review including appropriate understanding of early warning signals are required under each of the six core functions such as payments, market provisioning, investment management, insurance, deposits and lending and capital raising.