Enhancing resiliency against credit risk process fraud

To conduct the business of lending, banks employ credit risk processes – initial assessment, in-depth assessment leading to accept or reject decision, periodic review of loan performance and reporting. These processes expose banks to several frauds, referred to as "credit risk process fraud." Key categories of CRPF are misappropriation of funds, manipulation of data by borrowers and third-party providers, deviations from procedures and manipulation of reports. Efficient management of CRPF is vital for banks. Conversely, many banks do not provide commensurate importance to CRPF in terms of governance, clear definition to segregate it from frauds in credit operations and other related ones, infrastructure in terms of data, fraud investigation, systems, and automation.