“We don’t have any internal fraud…”

: Internal Fraud and its Risks to FinTech Banks

Abstract

This thesis investigates internal fraud within UK FinTech banks. Existing research has privileged offender psychology over the frauds themselves and the cultural conditions shaping them, while criminological frameworks remain insufficiently tested in FinTech banking settings. Moreover, the effectiveness of fraud controls is often assumed rather than measured, due to over-reliance on technology or the belief that absence of evidence implies evidence of absence.
This research addresses these gaps through three objectives: first, to identify why internal fraud is perpetrated in FinTech banks; second, to examine weaknesses in deterrence, detection and prevention mechanisms; and third, to explore how these institutions can strengthen themselves against insider threats. A qualitative methodology was adopted, combining documentary analysis of the FinTech banking sector with twenty-two semi-structured interviews with practitioners and consultants, analysed through a critical realist lens.
Findings reveal that internal fraud is seldom acknowledged as a risk due to denial, with FinTech banking cultures prioritising growth and trust over governance and controls. Preventive and detective measures often function as ‘tick-box’ requirements rather than evidence-based safeguards, while whistleblowing and awareness training are largely tokenistic. Technologies effective against external fraud are rarely adapted internally, leaving organisations exposed to both opportunistic and premeditated insider methodologies.
The thesis contributes empirically grounded insights into an underexamined fraud typology, challenging assumptions that internal fraud risk is confined to legacy banks or senior Finance executives. It extends fraud theory by showing how rationalisation and organisational silence manifest in FinTech banking contexts and provides practitioners with operationally relevant recommendations for control effectiveness. For regulators, the study underscores the need for sector-specific guidance beyond symbolic compliance.
Framed through a critical realist lens, the research exposes organisational and cultural mechanisms that make FinTech banks vulnerable to internal fraud, extending fraud theory into a digital-finance context.

Date of Award	8 Jan 2026
Original language	English
Awarding Institution	University of Portsmouth
Supervisor	Branislav Hock (Supervisor), Mark Button (Supervisor) & David Shepherd (Supervisor)