The collectivism and dark triad personality in banking fraud

Abstract

This study aimed to examine employee fraud triggered by psychological and cultural factors, including Hofstede’s collectivist culture, as well as dark triad personality traits (machiavellianism, narcissism, and psychopathy), which were considered potential triggers of employee fraud. The research was a quantitative study, based on data collected through a survey of respondents in 127 rural banks in Bali. Using a purposive sampling method, the heads of the funds, credit, treasury, and accounting departments were selected as research respondents, totaling 386 individuals. The survey was con-ducted from January to February 2024. The Partial Least Squares analysis technique was used to evaluate the hypotheses. The findings suggested that collectivism and dark triad personality traits (machiavellianism, narcissism, and psychopathy) had a positive effect on employee fraud in the banking sector. It was considered very important for banking institutions to enforce restrictions on practices that foster a collectivist culture, as such a culture could contribute to the proliferation of fraudulent activities by employees. However, the predictive value of the model needed to be improved by introducing moderating variables, considering the numerous factors that could influence fraudulent behavior.