CASE Study - ATM

VERTSOL
OTCO1
GROUP 4
Group Members:
Capalar, Marchel Loid
Carpio, Sophia Isabel
Mateo, Johann Marius
Mendoza, Lance Jimwell

This is a GROUP WORK.

The largest Financial Bank Scam involving a Phil Bank (RCBC) is one of the many
Banks involved

As a Software engineer/Business Analyst.

1.Pls provide a Process Flow Diagram of How the SCAM transpired.

2. Identify the weakness Areas in the Process.

In this particular situation, it was seen that there are two main areas of weakness - human
and safety errors. Human error was a major player in this scam because the staff of RCBC
Jupiter branch failed to authenticate the identities of the fake bank account holders;
hence, creating an opportunity for fraudulent activities in their bank. With a streamlined
bureaucratic process of opening a dollar account in the Philippines, these fake accounts
would have been easily flagged by the branch to the central bank of the country, taking
into account that RCBC was not part of any money laundering scheme. In creating a bank
account, a bank should be able to confirm if the account created is an actual account for
a legitimate individual. In line with this, it is considered a weak point in the process
because, if the account was authenticated and was able to provide the necessary
information to confirm if the account is real or not, there will be no issues. The bank can
simply cancel or void the account if it is confirmed to be fake. In addition, banks should
also have stringent safety and security measures in their system, monitoring their
employees of any fraudulent activities.
In relation to the safety and security errors, one thing that we identify as a weakness in
the process is the “lack of details” of the Federal reserve bank. However, there was no
way to stop the remaining 5 transfers totaling $101 million, $20 million was spared.
Additionally, their money was combined and put in a dollar account of William So Go.
However, 30 of the 35 transactions were not carried out due to "a lack of details."Also,
Bangladesh Bank ordered a “Stop Payment” order to the RCBC which caused some to
continue which is the funds were given to Wetan Xu, a licensed casino junket operator,
in cash installments. This implies that there are no indications of security for the provided
amount. Because of this, direct account transfers of funds will also be simple and
vulnerable to black hat hackers. Moreover, it can be observed that the transfer of the
remaining $81,000,000 from the Bangladesh Bank to the four fake accounts in RCBC
already seems suspicious enough. The RCBC bank seems to lack proper security
measures to clarify that the transfer of this huge amount is legitimate. If proper security
measures were implemented the bank can easily be identified where the money came
from and could have avoided being involved in the scam.

3. In the New Normal- are you in favor of more ATM or What Banking innovation can
slowly replace ATM.

As a group we are still in favor of more ATMs, but with specific innovations that can help
improve security measures to lessen the many crimes that can transpire. Completely
replacing the ATM with a new type of innovation will be too advanced for our time period
in the modern-day. Besides, our country is far from being a cashless society, meaning
the need for ATMs still persists among Filipinos. On this day, we are still not that advanced
in terms of technology, but we are slowly getting there as evidenced by the technologies
we have today. We think with our current time, that ATMs are still relevant, but they can
be slowly improved as time goes on. Currently, ATMs are the most effective for on-the-
go withdrawals, especially for making payments that are necessary. Additionally, they can
be connected to more recent inventions like online banking and e-Wallets, which might
make things simpler and easier for us. In the modern banking system we have today,
OTPs are more effective because they might be what strengthens our security and stops
harmful hackers from breaking in and hopefully in the future we might be able to
strengthen our cyber security measures and practices to prevent scams and hacking
within a bank’s system. The complete eradication of ATMs in the near future will require
the majority of Filipinos to have their own bank account or e-Wallet of some sorts. Until
then, ATMs are still beneficial to our society.

Reference:

Paz, C. D. (2016, March 17). Timeline: Tracing the $81-million stolen fund from
Bangladesh Bank. RAPPLER. Retrieved July 1, 2022, from
https://www.rappler.com/business/industries/125999-timeline-money-laundering-
bangladesh-bank/