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Banks need to be more transparent on fraud


Banks should report fraud cases involving their staff in a more transparent manner in order for them to maintain the public’s confidence in their ability to keep money safe.

Banking experts have advised that banks should take steps in announcing or reporting fraud cases in a more transparent manner so that the public can be educated on how it happened and what steps the bank will take.

Typically, most bank fraud cases are made known to the public only when police stations make announcements, banking experts said. They said banks should have more transparency in handling fraud cases.

Because of the lack of information from the banks, especially where there were unauthorized withdrawals from customer bank accounts, worried customers often asked whether their money is safe with the bank or whether the victims of such fraud would get compensated.

The fear of what it would do to their reputation has kept banks from announcing such fraud and the steps they have taken. “The bank may be solving the problem, but the lack of transparency makes people concerned,” said U Pe Myint, a senior advisor with a private bank, adding that it is the bank’s responsibility to highlight cases of fraud to the public.

A case that came up recently involved U Ko Oo, who opened a savings account back in September 2017 with a local bank and up until October 2018, there was K90 million in the account. But when he checked his account in April this year, only about K40 million remained.

After receiving no responses from the bank for two months following requests to solve the missing money, U Ko Oo sued the bank and called a press conference to highlight the case.

There have also been other cases where bank employees have stolen cash or transferred funds belonging to clients to their own accounts. These cases had involved hundreds of millions.

U Than Lwin, senior consultant at KBZ Bank said the need for transparency has to be balanced out with the banks’ need to protect the privacy of their customers. “It is part of a bank’s responsibility to protect the private data of their customers too,” he said.

He noted that fraud cases may not be publicly announced because the banks do not want their image affected but were solving the cases privately. “The problems are solved depending on the situation, some are to be made public, others private,” he added.

Source: Myanmar Times

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