International Research Journal of Education and Technology

Banking fraud has emerged as a major threat to the stability, credibility, and operational efficiency of the financial system, particularly with the rapid expansion of digital banking channels. This study examines the factors influencing banking fraud in the financial system by focusing on three major determinants: internal control weakness, employee pressure and rationalization, and technological/cyber vulnerability. The study adopted a quantitative, descriptive-cum-explanatory research design and collected primary data through a structured questionnaire administered to bank employees. A total of 155 usable responses were analyzed using descriptive statistics, Cronbach's alpha, exploratory factor analysis, Pearson correlation, and multiple regression analysis. The findings revealed that respondents perceived banking fraud risk, internal control weakness, employee pressure, and technological vulnerability at a moderate level. However, the reliability and validity results showed that the measurement scales lacked internal consistency, and the factor structure was not adequately supported. Further, correlation and regression results indicated that none of the three independent variables had a statistically significant positive effect on banking fraud occurrence in the present sample. Therefore, the hypotheses were not supported. The study concludes that while banking fraud is recognized as a continuing organizational risk, the current instrument requires refinement for stronger empirical validation. The research highlights the need for better questionnaire design, stronger fraud-risk assessment frameworks, and an integrated managerial approach combining process controls, ethical culture, and digital resilience.

Keywords: Banking Fraud, Internal Control Weakness, Employee Pressure and Rationalization, Technological/Cyber Vulnerability, Financial System