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Jakarta Post

Managing fraud risk in banking industry

  • Esther Roseline

Jakarta   /   Mon, June 17 2019   /  01:19 am

The banking industry is facing an acute problem of fraud. Time and time again, fraud has undoubtedly proven its colossal power to cause the downfall of companies and engender loss of public trust in financial markets — the 2008 global financial crisis is just one of the examples. The close interconnection of the financial system makes widespread and systemic fraud even more possible. Such power cannot be underestimated. As a response against fraud, Bank Indonesia (BI) issued Circular Letter No. 13/28/DPNP in 2011 to all commercial banks and made it compulsory for commercial banks to possess an effective antifraud strategy and submit the necessary reports related to the strategy and fraud cases to Bank Indonesia. In 2015, the Financial Services Authority (OJK) issued regulation No. 4/POJK.03/2015 on rural bank governance to require the implementation of good corporate governance with th...