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This paper aims to explore various cultural and behavioral issues associated with the problem of investment fraud in Indonesia.
Abstract
Purpose
This paper aims to explore various cultural and behavioral issues associated with the problem of investment fraud in Indonesia.
Design/methodology/approach
By examining multiple cases of investment fraud in Indonesia as well as reviewing publicly available government reports, this study highlights several important cultural and behavioral issues associated with the susceptibility of Indonesian financial services consumers to investment fraud to understand better the dynamics of the victimization process. By using multiple cultural and behavioral theories, this study demonstrates how such issues shape the interactions between investment fraudsters and investment fraud victims.
Findings
This study demonstrates that multiple cultural and behavioral factors have created and shaped an environment where fraudsters can exploit people’s behavioral loopholes for their fraudulent schemes. In particular, the high power distance and high collectivism have been identified by this study as contributing to the high level of materialism in the country, which in turn makes people more susceptible to the temptation of get-rich-quick schemes. Investment fraudsters, being students of human behavior, use their behavioral knowledge to devise various means to deceive their victims. They use multiple psychological principles to stimulate target victims “gullibility to make them more vulnerable to fraudulent persuasion. In many cases, even financially literate people are not immune to fraudsters” deceitful messages. This study highlights gullibility production as a foundation for investment fraudsters to devise their means by which victims are manipulated to accept certain beliefs that depart from facts and evidence.
Practical implications
This paper contributes to the innovation in anti-fraud practice by building a better understanding of multiple cultural and behavioral issues associated with investment fraud victimization.
Originality/value
This paper brings a new perspective into the field of anti-fraud to stimulate innovation, in particular in investment fraud prevention.
Katelyn A. Golladay and Jamie A. Snyder
This study expands the empirical understanding of financial fraud victims and the consequences that emerge as a result of financial fraud victimization. In addition, this study…
Abstract
Purpose
This study expands the empirical understanding of financial fraud victims and the consequences that emerge as a result of financial fraud victimization. In addition, this study aims to assess the impact of the unique role victims play in financial fraud and the impact self-identifying as a victim has on the negative consequences they experience.
Design/methodology/approach
Data from the Supplemental Fraud Survey to the National Crime Victimization Survey are used to assess the negative consequences of financial fraud victimization.
Findings
Results suggest that victims of financial fraud experience increased distress and financial complications following their victimization experience. In addition, self-reported victim status is found to significantly increase a respondent’s likelihood of reporting emotional distress and financial complications. Implications for research, theory and policy are discussed.
Originality/value
While empirical studies on the consequences of identity theft victimization have been increasing in recent years, financial fraud victimization remains understudied. Given the victim involvement in financial fraud, the consideration of financial fraud independent of identity theft fraud is vital.
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Oswald A. J. Mascarenhas, Munish Thakur and Payal Kumar
We revisit the problem of redesigning the Master in Business Administration (MBA) program, curriculum, and pedagogy, focusing on understanding and seeking to tame its “wicked…
Abstract
Executive Summary
We revisit the problem of redesigning the Master in Business Administration (MBA) program, curriculum, and pedagogy, focusing on understanding and seeking to tame its “wicked problems,” as an intrinsic part and challenge of the MBA program venture, and to render it more realistic and relevant to address major problems and their consequences. We briefly review the theory of wicked problems and methods of dealing with their consequences from multiple perspectives. Most characterization of problems classifies them as simple (problems that have known formulations and solutions), complex (where formulations are known but not their resolutions), unstructured problems (where formulations are unknown, but solutions are estimated), and “wicked” (where both problem formulations and their resolutions are unknown but eventually partially tamable). Uncertainty, unpredictability, randomness, and ambiguity increase from simple to complex to unstructured to wicked problems. A redesigned MBA program should therefore address them effectively through the four semesters in two years. Most of these problems are real and affect life and economies, and hence, business schools cannot but incorporate them into their critical, ethical, and moral thinking.
Qun Bai, Senming Tan, Zheng Yuelong, Jiafu Su and Li Tingting
This study investigates the credit supervision issue in rural e-commerce. By studying the trading strategies of buyers and sellers under different credit supervision measures and…
Abstract
Purpose
This study investigates the credit supervision issue in rural e-commerce. By studying the trading strategies of buyers and sellers under different credit supervision measures and the impact of different pricing strategies on the trading strategies of both parties, this paper proposes regulatory suggestions for the increasingly severe credit problems in rural e-commerce.
Design/methodology/approach
In the online agricultural product transaction between farmers and consumers, both parties' decision-making is a dynamic process. Using the copying dynamic model of the evolutionary game, this study establishes two evolutionary game models to explore the factors affecting credit supervision in the rural e-commerce transaction process. Then, the study provides corresponding countermeasures and suggestions.
Findings
First, credit supervision measures implemented by rural e-commerce platforms and the Government's legal system construction and infrastructure construction guarantees influence both parties' trust choices in rural e-commerce transactions. Second, price is a key factor affecting both parties' trading strategies. In the case of relatively fair prices, the higher the proportion of farmers who choose “low price” and “honest transaction” strategies, the easier that is for consumers to choose to trust farmers. In contrast, the higher the price, the higher the proportion of consumers who choose the “trust farmers” strategy, and the more willing farmers are to choose honest transactions.
Originality/value
This work develops a new approach for analyzing rural e-commerce credit supervision. Moreover, this study helps establish and improve the credit supervision mechanism of rural e-commerce and further realize the long-term sustainable development of the rural economy.
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Nilaya Murthy and Santosh Gopalkrishnan
This paper aims to understand the emotional patterns of senior citizens when they digitally transact online and how the personality trait of neuroticism can be a vital part of…
Abstract
Purpose
This paper aims to understand the emotional patterns of senior citizens when they digitally transact online and how the personality trait of neuroticism can be a vital part of being susceptible to fraud. The authors identify with the cognitive aspect of fear as a vista of neuroscience and behavioural finance in digital banking in today’s banking 5.0 where consumer centricity stands as one of the pillars of the Digital Payment Index of RBI.
Design/methodology/approach
This study is empirical and investigative in nature. Primary data has been collected through online questionnaires (via Google Forms) and the interview method to understand the phenomenology of fear and incidents related to becoming victims of fraud and its propensity.
Findings
The results exhibit that fear and emotional patterns do affect vulnerability and have a long-lasting psychological impact and susceptivity towards digital frauds.
Practical implications
Fear as an emotion is used to understand the emotional expressive patterns of senior citizens as consumers of digital banking. The OCEAN model is one of the widely used personality models at the global level. This research study helps in highlighting the nuances linked to the behavioural and cognitive part of fear in digital crime.
Originality/value
This research will be beneficial to reduce the susceptibility towards fraud from a behavioural perspective in the usage of digital banking and evaluate solutions for senior citizens to mitigate and cope up with the pressures and perils associated with digital frauds.
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This paper aims to discuss the impact of fraud on individuals’ wellbeing by drawing on insights from the academic literature. It also highlights literature gaps and suggests new…
Abstract
Purpose
This paper aims to discuss the impact of fraud on individuals’ wellbeing by drawing on insights from the academic literature. It also highlights literature gaps and suggests new avenues for future research.
Design/methodology/approach
This paper is based on a comprehensive literature review to gain insights into the impact of fraud on individuals’ wellbeing and identify literature gaps. The review is not limited to a particular date or a specific discipline.
Findings
The results reveal a general consensus in the literature that fraud severely and negatively impacts individuals’ wellbeing. Fraud’s impact on victims goes beyond financial hardship. It could result in stress, anger, upset, worries, fear of future victimisation, shame, loss of self-esteem, health deterioration, loss of confidence in financial matters, suicide ideation, unemployment, homelessness, less happiness and life satisfaction and broken relationships. However, research on how fraud impacts individuals’ wellbeing is scarce and has yet to receive substantial attention.
Originality/value
To the best of the author’s knowledge, this is the first comprehensive literature review compiling evidence on the impact of fraud on individuals’ wellbeing.
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Shubhasree Bhadra and Kamakhya Narain Singh
News items like “A whopping 2 lakh gullible investors were cheated…….” amply illustrate the extent of problems and hardships caused by financial frauds related to Ponzi schemes…
Abstract
Purpose
News items like “A whopping 2 lakh gullible investors were cheated…….” amply illustrate the extent of problems and hardships caused by financial frauds related to Ponzi schemes, collective investment schemes (CIS), unregulated deposit schemes, etc. In India, over the years, many Ponzi and unregulated investment schemes have taken place, causing huge economic and financial loss to Indian economy. This paper aims to examine why investment such schemes like Ponzi schemes and CIS become popular, how such schemes got operated in different periods and what could be done to safeguard the interests of investors.
Design/methodology/approach
The analysis is done based on secondary data and research work of various researchers, organisation and institutions, which are available in the public domain.
Findings
This paper has tried to analyse various characteristics of such fraudulent schemes, like their modus operandi, promotional activity, background of promoters and legal process involved in recouping financial loss of millions of investors. This paper also examines the demand-side factors that are responsible for popularity of those schemes in India. Noting the regulatory changes and other initiative taken by regulatory authorities to control the supply of unregulated investment schemes, this paper indicates potential actions, which could be undertaken to make people aware about the risks and issues related with such fraudulent schemes.
Originality/value
This paper gives an overview about various aspects of unregulated investment schemes, which have duped numerous people at different point of time. To the best of the authors’ knowledge, this research work is original and has not been published in any other journal.
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Nhung Thi Nguyen, An Tuan Nguyen, Ha Thi Nguyet To and Thanh Ta Hong Le
This paper aims to explore factors influencing Vietnamese people’s susceptibility to fraud through cryptocurrency Ponzi schemes.
Abstract
Purpose
This paper aims to explore factors influencing Vietnamese people’s susceptibility to fraud through cryptocurrency Ponzi schemes.
Design/methodology/approach
This study uses the gullibility theory, the theory of planned behavior theory, the traditional theory of finance and the theory of financial behavior, to develop a questionnaire which is then sent to respondents who are Vietnamese individuals. Subsequently, the partial least squares structural equation modeling approach (PLS-SEM) is used to analyze 370 collected responses.
Findings
This research shows the important roles that trust, risk appetite and knowledge of Ponzi play in respect of fraud susceptibility, among which trust has the highest positive impact. Moreover, there is no evidence of relationships between Vietnamese people’s susceptibility to fraud via cryptocurrency Ponzi schemes and attitudes toward investment scams, knowledge of investment or knowledge of Ponzi schemes.
Research limitations/implications
This paper collects only 370 valid responses, which raises some questions regarding the diversity and representativeness of the survey sample.
Practical implications
This study provides evidence on factors affecting Vietnamese people’s fraud susceptibility to cryptocurrency Ponzi schemes, which helps both authorities and individuals to be vigilant against investment scams.
Social implications
This research proposes several recommendations to prevent investment scams in cryptocurrency trading, from the perspective of state regulators and individuals.
Originality/value
This working paper provides a new approach using PLS-SEM to build a theoretical framework for the possibility of becoming victims of investment scams in Vietnam using a combination of different theories from criminology and finance.
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This qualitative study aims to examine bankers’ perspectives regarding financial inclusion, the challenges it faces and the scope for improvement. This research proposes a…
Abstract
Purpose
This qualitative study aims to examine bankers’ perspectives regarding financial inclusion, the challenges it faces and the scope for improvement. This research proposes a financial inclusion model, considering the inputs received by bankers. Financial exclusion of different sections is an issue common to emerging countries.
Design/methodology/approach
Data for qualitative research were collected through interviews with bank officials. The information was gathered from 32 bankers from India’s several zones (North, South, West and East). The data were collected from bankers from different public and private sector banks. Thematic analysis was performed up to the point of saturation to study the response received from bankers.
Findings
Bank-related issues such as frequent computer problems, network connectivity problems, costs, a shortage of bank branches, fewer transactions through automated teller machines and a shortage of banking staff affect customers’ confidence in formal banking. Banking services are disrupted by a lack of trust in banking correspondents (BCs), as they are not regular employees of banks. Limits on daily transactions discourage high-value customers from using BCs and kiosks. The time spent on administrative formalities impacts customers. Financial inclusion is affected by availability, accessibility, usage and affordability. Digital financial literacy is essential for ease of transaction, but awareness about financial products helps protect customers from cyber scams. The findings of this research would benefit financial institutions globally in developing their businesses and helping to achieve financial inclusion and the United Nation’s sustainable development goals (SDGs).
Originality/value
This research paper undertakes a qualitative analysis of the views collected from bankers. Bankers are crucial stakeholders in the successful implementation of the National Financial Inclusion Policy of the Government of India. Bankers’ perspectives will be important not only for India and its researchers but also in the global context, as the UN’s SDGs focus on leaving no one behind.
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This study aims to determine experimentally factors affecting the satisfaction of retail stock investors with various investor protection regulatory measures implemented by the…
Abstract
Purpose
This study aims to determine experimentally factors affecting the satisfaction of retail stock investors with various investor protection regulatory measures implemented by the Government of India and Securities and Exchange Board of India (SEBI). Also, an effort has been made to gauge the level of satisfaction of retail equities investors with the laws and guidelines developed by the Indian Government and SEBI for their invested funds.
Design/methodology/approach
To accomplish the study’s goals, a well-structured questionnaire was created with the help of a literature review, and copies of it were filled by Punjabi retail equities investors with the aid of stockbrokers, i.e. intermediaries. Amritsar, Jalandhar, Ludhiana and Mohali-area intermediaries were chosen using a random selection procedure. Xerox copies of the questionnaire were given to the intermediaries, who were then asked to collect responses from their clients. Some intermediaries requested the researcher to sit in their offices to collect responses from their clients. Only 373 questionnaires out of 1,000 questionnaires that were provided had been received back. Only 328 copies were correctly filled by the equity investors. To conduct the analysis, 328 copies, which were fully completed, were used as data. The appropriate approaches, such as descriptives, factor analysis and ordinal regression analysis, were used to study the data.
Findings
With the aid of factor analysis, four factors have been identified that influence investors’ satisfaction with various investor protection regulatory measures implemented by government and SEBI regulations, including regulations addressing primary and secondary market dealings, rules for investor awareness and protection, rules to prevent company malpractices and laws for corporate governance and investor protection. The impact of these four components on investor satisfaction has been investigated using ordinal regression analysis. The pseudo-R-square statistics for the ordinal regression model demonstrated the model’s capacity for the explanation. The findings suggested that a significant amount of the overall satisfaction score about the various investor protection measures implemented by the government/SEBI has been explained by the regression model.
Research limitations/implications
A study could be conducted to analyse the perspective of various stakeholders towards the disclosures made and norms followed by corporate houses. The current study may be expanded to cover the entire nation because it is only at the state level currently. It might be conceivable to examine how investments made in the retail capital market affect investors in rural areas. The influence of reforms on the functioning of stock markets could potentially be examined through another study. It could be possible to undertake a study on female investors’ knowledge about retail investment trends. The effect of digital stock trading could be examined in India. The effect of technological innovations on capital markets can be studied.
Practical implications
This research would be extremely useful to regulators in developing policies to protect retail equities investors. Investors are required to be safeguarded and protected to deal freely in the securities market, so they should be given more freedom in terms of investor protection measures. Stock exchanges should have the potential to bring about technological advancements in trading to protect investors from any kind of financial loss. Since the government has the power to create rules and regulations to strengthen investor protection. So, this research will be extremely useful to the government.
Social implications
This work has societal ramifications. Because when adequate rules and regulations are in place to safeguard investors, they will be able to invest freely. Companies will use capital wisely and profitably. Companies should undertake tasks towards corporate social responsibility out of profits because corporate houses are part and parcel of society only.
Originality/value
Many investors may lack the necessary expertise to make sound financial judgments. They might not be aware of the entire risk-reward profile of various investment options. However, they must know various investor protection measures taken by the Government of India & Securities and Exchange Board of India (SEBI) to safeguard their interests. Investors must be well-informed on the precautions to take while dealing with market intermediaries, as well as in the stock market.
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