This is a 47 per cent increase 2015 which the bank recorded K17 million.
BSP Chief Executive Officer (CEO), Robin Fleming, says fraud has been one of the issues that BSP and most Banks in PNG have had to deal with.
And despite many controls to reduce the prospect of fraud occurring across such a large diversified geography, and the number of customer they have, Fleming says it is an unfortunate expense that has to be dealt with particularly in PNG.
He highlighted internal aspects which the bank tries to reinforce to limit and avert fraud behaviour and activity.
“Integrity is one that we focus on quite regularly. Every time we go to a branch we are reminding people that these values are similar to Christian values we all or many people in PNG follow.
“We always recognise there is temptation, economic times are difficult, but we try to resist that. Equally we have to put in place, additional controls wherever possible, to try to reduce potential for staff in collusion directly and indirectly.
“Not everyone realises that passing of information can unconsciously provide someone, who is dishonest as our staff member, with some information who can facilitate a fraud event,” Fleming said.
He said fraudsters have been able to stay ahead of banks in taking advantage of loopholes in electronic banking systems as well as targeting visa and master card users.
Fleming said BSP will be introducing more security measures, through may cost significant amounts of money, to address fraud activity.
“What the additional controls means is that at times, it can slow a transaction process. Like many things, it’s a balance between having a transactions and controls associated with these electronic banking networks that they do facilitate off-site transactional capability, whilst ensuring that its not too open and someone can perpetrate a fraud.
“So (we) put in place additional controls, trying to bring more of the control of the mobile banking in particular back within the control of BSP, and more real time review of transactional activity,” Fleming said.
He added: “Its international fraudsters as well who will target developing countries with scam card fraud, visa master card, where perhaps some of those controls haven’t been as strong. What that means BSP undertakes a process whereby our cards by the end of this year will be chip based cards.
“An additional control measure, having to move to more mandatory pin user, when you have a visa card or master card. And upgrading our EFTPOS devices and our ATM’s to ensure they are also chip card compliant, so that from a liability perspective, in the event there is fraud, the liability passes on to those who don’t have controls as strong as BSP. They are very costly initiatives, probably K10 to K15 million across the group in the next 12 months to prevent this type of fraud.”
The losses however did not have a significant impact on profits as the BSP Group recorded a net profit after tax of K643.5 million in 2016, which is a 21 per cent increase from K531.9 million in 2015.