Detecting fraudulent behavior in banking services: A modified Fraud Pentagon Theory integrating whistleblowing systems and banking fintech security

Type of the article: Research ArticleAbstractFraudulent behavior in banking services remains a critical challenge in Indonesia, especially amid rapid digitalization and increasing fintech adoption, while traditional models such as the Fraud Pentagon Theory (FPT) are limited in explaining new fraud drivers related to technological exposure and cultural dynamics. This study aims to detect fraudulent behavior in Indonesian banking services by modifying the FPT through the integration of prestige culture and fintech usage. It employed a survey approach targeting front-office employees of private national banks in Indonesia with at least two years of professional customer service experience. This sample was chosen because such employees are directly exposed to operational pressures, opportunities, and technological systems, making them highly relevant for detecting fraud risk factors. Data were collected using offline and online questionnaires and analyzed with Structural Equation Modeling (SEM) using WarpPLS. The results indicate that the seven factors of pressure (β = 0.916; p < .001), opportunity (β = 0.929; p < .001), rationalization (β = 0.847; p < .001), capability (β = 0.862; p < .001), control (β = 0.907; p < .001), fintech usage (β = 0.712; p < .001), and prestige culture (β = 0.837; p < .001) are significant in determining fraudulent activities, whereas the whistleblowing system (β = –0.312; p = .002) and fintech security usage (β = –0.298; p = .003) are moderators. Based on the findings, the conclusion is that pressure and opportunity are the most potent predictors of fraudulent activity, while whistleblowing and fintech security systems are important mechanisms for preventing such activity.