Ways to protect against fraud by the banks from lending to individuals

• Author: Victor Troaca
• Position: Ph. D reader. 'Titu Maiorescu' University, Bucharest
• Pages: 225-230

225

WAYS TO PROTECT AGAINST FRAUD BY THE BANKS

FROM LENDING TO INDIVIDUALS

Ph. D reader Victor Troaca

„Titu Maiorescu” University, Bucharest

e-mail: victor.troaca@brd.ro

Abstract:

Banking companies in Romania have made in recent years an accelerated

pace of development of their business in credit in general, and the crediting of

individuals in particular. Like any activity with a dynamic and sustained activity of

lending to individuals held by the banks is generating risks. In all the risks to which

banks are exposed to companies in their lending to individuals are included and

the risks of fraud. Such risks can be generated both by internal factors and external

factors. Identifying those factors and measures to protect the banks from the risks

of fraud are elements to be stressed in this paper.

Key words: bank, credit risk, risk of fraud, measures against embezzlement

knowing customers.

1. Introduction

One of the components increasingly important activity of banks, is the

operations and services for the retail market and in their lending to individuals

occupies a significant share, with strong influences of assets acquired by a bank.

Accelerated pace of development of the business of lending to individuals

registered by the Romanian banking companies in recent years, was a consequence

of several factors, which include: extremely low level that you record these

operations in the activity of banks, low volume of loans that record companies

banking on their total exposures to the population, low degree of financial

intermediation, economic growth and increase capacity default of payment of

potential debtors, the banks increased ability to engage in the business of lending to

these segment and to manage these risks, the implementation of methods and

techniques based credit scoring systems which have allowed a real industrialization

of these operations, market requirements, competition on the part of the bank, and

on the other side competition that has generated - an entry on the credits for

individuals and non-bank financial institutions.

The evolution of the natural development of the credit population by the

banks will not stop here. In the years ahead it will continue the expansion,

following the trend similar banking markets in the region, close to the stage that we

will record these transactions in the EU Member States.