Financial scams in Bangladesh: Why fraudsters continue to outsmart the system

Bangladesh's rapid digital transformation has brought remarkable progress in financial inclusion, but it has also created fertile ground for increasingly sophisticated financial scams. Today, fraudsters target not only ordinary citizens but also businesses, banks, educational institutions, NGOs and government agencies through phishing, identity theft, fake mobile financial service accounts, online investment fraud, business email compromise and money laundering.

The widespread adoption of internet banking, mobile financial services, QR-code payments and e-commerce has made financial transactions faster and more convenient. However, law enforcement and regulatory systems have struggled to keep pace with the speed and complexity of cyber-enabled financial crimes, many of which are organised and operate across national borders.

The growing threat is reflected in official data. According to the Bangladesh Financial Intelligence Unit (BFIU) Annual Report 2024–25, reporting organisations submitted 30,199 Suspicious Transaction Reports (STRs) and Suspicious Activity Reports (SARs) during the fiscal year, the highest number ever recorded. Of these, 20,524 were STRs and 9,675 were SARs, with nearly 95% originating from the banking sector. The figures indicate both improved monitoring and a sharp increase in suspicious financial activities.

Effective prevention requires real-time intelligence sharing, advanced digital forensic capabilities, robust personal data protection laws, artificial intelligence-based fraud detection, continuous public awareness campaigns and close international cooperation to trace criminal networks operating across borders.

Modern financial scams are no longer carried out by isolated individuals. They are increasingly managed by organised criminal networks, with members performing specialised tasks such as collecting personal information, creating fake identities, opening fraudulent bank or mobile financial service accounts and transferring stolen money through complex financial channels.

A major concern is how fraudsters obtain confidential personal information. Many people unknowingly expose sensitive details on social media, including birthdays, family information, workplace details, travel plans and mobile phone numbers. Criminals use this information to build convincing victim profiles. Phishing is another common tactic. Fake websites, emails and SMS messages impersonating banks, government agencies or mobile financial service providers trick users into revealing passwords, PINs and one-time passwords (OTPs).

Data breaches further increase the risk. Customer information may be compromised through cyberattacks or dishonest insiders within banks, telecom companies, courier services, insurance firms and e-commerce platforms. Fake job advertisements, online loan applications and promotional campaigns are also used to collect National Identity numbers, bank account details and other personal information.

The BFIU has identified identity fraud, forged documents, shell accounts and suspicious transaction patterns as common indicators of financial crime. Under the Money Laundering Prevention Act 2012, reporting organisations are legally required to detect and report such activities to the BFIU.

Bangladesh has enacted important legislation, including the Money Laundering Prevention Act 2012 and the Cyber Security Act 2023, while agencies such as the BFIU, Criminal Investigation Department (CID), Anti-Corruption Commission (ACC) and Bangladesh Bank have strengthened cooperation in financial crime investigations. 

According to the BFIU, requests for financial intelligence from investigative agencies have increased significantly, reflecting stronger institutional coordination. Authorities have also frozen assets linked to financial crimes and collaborated with the World Bank–UNODC Stolen Asset Recovery (StAR) Initiative and foreign financial intelligence units to trace illicit assets transferred overseas.

Despite these efforts, enforcement remains a challenge. Criminals move stolen funds rapidly across multiple accounts, digital evidence can disappear quickly, and many fraud networks operate from outside Bangladesh. Public awareness also remains limited, with many victims continuing to share confidential banking information with fraudsters.

Bangladesh should now adopt a comprehensive national anti-scam strategy by strengthening personal data protection laws, introducing artificial intelligence-based fraud detection, expanding digital forensic capacity and establishing specialised financial crime courts. Equally important is nationwide financial literacy to educate citizens about phishing, identity theft and online fraud.

Nevertheless, the number of convictions remains disproportionately low compared with the volume of reported fraud. Investigations often take years. Digital evidence may disappear quickly, stolen funds are transferred through multiple accounts within minutes, and many criminal networks operate from outside Bangladesh. Investigators frequently face shortages of digital forensic specialists, advanced analytical tools and trained prosecutors capable of handling complex cyber-enabled financial crimes.

Victims themselves also contribute, often unknowingly, to the success of scammers. Many still share OTPs, PIN numbers and passwords over the telephone despite repeated warnings from banks and mobile financial service providers. Others respond to fake prize offers, unrealistic investment opportunities or fraudulent online shopping promotions. Improving public awareness is, therefore, as important as strengthening law enforcement.

Bangladesh now needs a comprehensive national strategy against financial fraud. First, Parliament should enact a robust Personal Data Protection law with strict penalties for institutions or individuals responsible for unlawful disclosure of customer information. Second, banks, telecom operators and digital financial service providers should adopt artificial intelligence-based fraud detection systems capable of identifying suspicious transactions in real time. 

Third, specialised financial crime courts should be established to ensure the speedy disposal of complex cybercrime and money laundering cases. Fourth, every major public and private institution should be required to strengthen cybersecurity, conduct regular audits and implement strict employee accountability measures.

Finally, financial literacy must become a national priority. Schools, universities, media organizations and financial institutions should work together to educate citizens about digital fraud, phishing, identity theft and safe online financial practices. Prevention remains the most effective defence against increasingly sophisticated criminal networks.

Bangladesh has made remarkable progress in digital finance and financial inclusion. However, those achievements will remain vulnerable unless the country demonstrates equal determination in protecting citizens from financial crime. Strong laws must be matched by swift investigations, effective prosecutions, institutional accountability and public awareness. Unless fraudsters are consistently identified, prosecuted, punished and stripped of their illicit assets, financial scams will continue to erode public trust, weaken the economy and threaten the country's digital future.

Around the world, several countries have significantly reduced financial fraud by combining strong legislation, rapid law enforcement, modern technology and close coordination among financial institutions, regulators and law enforcement agencies. Their experiences offer practical lessons that Bangladesh can adapt to strengthen its own fight against organised financial crime.

Singapore is widely regarded as a global leader in combating financial fraud. In 2019, the Singapore Police Force established the Anti-Scam Centre (ASC) to coordinate swift action against scammers. Working closely with banks, financial institutions and telecommunications companies, the Centre can trace suspicious transactions, freeze fraudulent bank accounts and prevent stolen money from being transferred overseas. 

According to the Singapore Police Force, the ASC has prevented or recovered hundreds of millions of Singapore dollars and disrupted thousands of scam cases. Singapore has further strengthened its legal framework through the Protection from Scams Act, enabling authorities to intervene quickly and suspend suspicious financial transactions before victims lose their savings.

The United Kingdom has also adopted a comprehensive national strategy against fraud. Recognising fraud as one of the country's most damaging economic crimes, the government has strengthened cooperation among the National Crime Agency (NCA), the National Economic Crime Centre (NECC), banks and technology companies. Under the UK's Fraud Strategy, financial institutions increasingly use artificial intelligence to detect suspicious transactions, identify unusual account activity and alert customers in real time. Banks are also required to compensate victims of certain authorised payment scams, creating stronger incentives to improve fraud prevention systems.

India has enhanced its capacity to combat cyber-enabled financial crimes through the Indian Cyber Crime Coordination Centre (I4C) and the National Cyber Crime Reporting Portal. Citizens can report scams immediately through a nationwide helpline and online platform, allowing authorities to freeze fraudulent transactions before stolen funds disappear. Indian law enforcement agencies also cooperate with INTERPOL, Europol and other international partners to dismantle cross-border cybercrime syndicates involved in phishing, identity theft and online investment fraud.

Likewise, Australia established the National Anti-Scam Centre under the Australian Competition and Consumer Commission (ACCC) in 2023. The Centre brings together banks, telecommunications providers, digital platforms and law enforcement agencies to exchange intelligence in real time and coordinate rapid responses to emerging threats. Australia's Scams Prevention Framework further requires banks, telecom operators and technology companies to take proactive measures to detect, prevent and disrupt fraudulent activities before consumers suffer financial losses.

These international experiences clearly demonstrate that financial scams cannot be tackled by law enforcement agencies alone. Effective prevention requires real-time intelligence sharing, advanced digital forensic capabilities, robust personal data protection laws, artificial intelligence-based fraud detection, continuous public awareness campaigns and close international cooperation to trace criminal networks operating across borders.

Bangladesh should adopt these proven approaches by establishing a National Anti-Scam Centre that brings together the Bangladesh Financial Intelligence Unit (BFIU), Bangladesh Bank, Criminal Investigation Department (CID), Bangladesh Police, the Anti-Corruption Commission (ACC), the Bangladesh Telecommunication Regulatory Commission (BTRC), commercial banks, telecom operators and mobile financial service providers under a single coordination framework. 

At the same time, the country should enact a strong Personal Data Protection Act, strengthen cybersecurity standards and require financial institutions to deploy artificial intelligence-based fraud detection systems. By combining effective legislation, institutional coordination and public awareness, Bangladesh can significantly reduce financial [fraud and strengthen public confidence in its rapidly expanding digital economy.  

Shahiduzzaman is the Editor and CEO of News Network

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.