THE ROLE OF LEADERSHIP, CORPORATE CULTURE REINFORCEMENT, AND HUMAN CAPITAL DIVISION IN PREVENTING FRAUD STUDY ON ISLAMIC BANKS

DOI: 10.21532/apfjournal.v5i2.161 ABTRACT The rapid growth of Islamic Banking in Indonesia raises the risk of fraud as happened in Islamic Bank X in the last few years, in which the trend continues to increase. This study aims to unravel the root of fraud problem in Islamic Banking and strive to provide appropriate solutions in the prevention of fraud through qualitative approach. This study provides a formulation of role model and leadership policy through the reinforcement of organizational culture and the role of Human Capital Division as a step in the prevention of fraud.


INTRODUCTION
The growing development of the Islamic banking industry and the increasing number of Islamic Banking offices also encourage the emergence of issues regarding human resources. Viewed from a quantity perspective, the number of employees of Islamic Commercial Banks (Indonesian: Bank Umum Syariah /BUS) and Islamic Business Units (Indonesian: Unit Usaha Syariah / UUS) in Indonesia until June 2016 reached 54,923 people, meanwhile Islamic Community Financing Banks (Indonesian: Bank Pembiayaan Rakyat Syariah / BPRS) reached 4,495 people (Islamic Banking Statistics, 2016). The large number of employees will certainly raise the risk of fraud committed by internal employees of Islamic Banking itself, including fraud cases that occurred in Islamic Bank X, one of the largest Islamic Banks in Indonesia.
Islamic Bank X currently employs approximately 17 thousand employees spread across 700 outlets throughout Indonesia. Over the past few years, there have been found various violations or fraud committed by employees. This certainly results in losses for the company. Fraud findings that are used as reference data are sourced from online media. Nevertheless, there are still many cases of fraud that occur but are not publicized by the media. The precautionary factor is the concern of Islamic banks regarding the problem of fraud because it is closely related to the public trust in banking institutions. The chronology of fraud cases at Islamic Bank X over the past few years is as follows (Appendix 1).
Based on the data above, the most common mode of fraud was regarding fictitious lending. The fraud cases involved the Islamic Bank employees, especially policy makers / leaders. Then the scenes were identified from big cities to regions. These cases need serious attention because the fraud cases occurring in Islamic Banks are not the same as the fraud cases occurring in Conventional Banks. Then the question is: "how is the empowerment of sharia aspects carried out by the company toward this phenomenon".
There are three aspects why fraud cases occured at Islamic Bank X, based on observation results. The Islamic banking system was not yet stable. In 2010 (the initial example of fraud cases) until 2013 were the years where there were many cases of fraud. This is because during these years the information and technology systems or core banking systems were still not integrated, so that it was prone to burglary Human resources were still inadequate. The number of qualified human resources at Islamic Banking was still limited. In recruitment process, the Islamic Bank still employed a lot of employees who had experienced before. Culturally, it could be different, especially ex-conventional banks. And in religion aspect, it could also be different.
Employee lifestyle, it is undeniable that an excessive lifestyle opens the way for fraud.
In this case the risk mitigation aspects of supervision of the leadership were still weak. The leaders could not be role models, because some of them still abused their authority. Such a condition encourages the study to find out appropriate solutions for preventing fraud and focusing on the role of leaders.

LITERATURE REVIEW AND HYPO-THESIS
Leadership is an important element in a leader. A leader has an important role in determining the progress or failure of an organization / company. A company can grow and develop well because the leader can stimulate the work spirit of human resources so that the company's performance always increases. According to Stoner, managerial leadership can be defined as a process of directing and giving influence to the activities of group members whose duties are related to each other. Therefore, the leadership model can influence subordinates to form harmonious cooperation to achieve company goals. In order for the company's vision to be achieved, a leader must be able to be a role model for his subordinates.
One of important components in a company is the presence of a corporate culture consisting of several corporate values. Brown (1998: 306) states that organizational culture refers to a system of shared meanings embraced by members of an organization and distinguishes the organization from other organizations. Values in organizational culture can act as a source of important strength that is widely believed and adhered to in facing the challenges of environmental change. But organizational culture can be a burden for success if the organizational culture is not in accordance with the goals of the organization. Organizations that are able to achieve and maintain success are characterized by the following organizational culture: • The core values of the organization are strongly embraced by members of the organization; • There are general perceptions that are believed and upheld jointly by members of the organization; • Culture is considered a source of important and valuable strength; • Everything is regulated and runs well based on organizational cultural values; • Existing cultural values are shared widely within the organization; • Members of the organization feel bound to the core values that exist in organizational culture.
The function of the Human Capital Division as an employee relationship needs to be put forward as a party that prioritizes the welfare of employees which will affect the increasing productivity of the company. So Human Capital Division needs to make changes in terms of the quality of business process services including by making or updating products in Circular that support the welfare of employees.
The indicator of a weakened organizational culture in an organization is the emergence of fraud cases. According to the Association of Certified Fraud Examiners (ACFE), the three main branches of fraud tree are (a) fraud in the form of corruption, (b) fraud in the form of asset embezzlement, (c) fraud in financial statements In general, fraud occurs because of three factors: • Opportunity. This opportunity usually arises as a result of weak internal control system in the organization. The opportunity can also make individuals or groups, who previously had no motive to commit fraud, finally commit fraud. • Incentives or pressure. For example, pressure can arise due to personal financial problems and bad qualities such as gambling, drugs, excessive debt and lifestyle, and unrealistic deadlines and work targets. • Attitude or rationalization to justify fraud.

Role Model of a Leader
The leader (Division Head, Branch Head or manager level) is the first person who internalizes cultural values and anti-fraud values and subsequently disseminates and doctrines the anti-fraud cultural reinforcement to subordinates. In this case, role model is needed so that the whole process can be accepted by employees. The implementation of corporate culture and anti fraud doctrine in Islamic Banks must be supported by all organizational structures, from top to bottom. Each head of the work unit (leadership) is automatically responsible and becomes a role model for his subordinates. The Board of Directors acts as a Change Leader and is followed by the Head of Division or Regional Head as a Change Champion. The implementation is carried out by the Corporate Culture Team. The derivation of these programs is further socialized by Change Agents consisting of Head of Department, Head of Branch Office, Head of Sub-Branch Office, Unit Manager and Section Head. The target of the change is all employees of the Islamic Bank. With a structural organization, it will be easier to monitor the course of the cultural program.
The following is a scheme of the relationship between role models and corporate culture that is implemented in the program of cultural values reinforcement in Islamic Bank (Figure 1).

The Role of Human Capital Division
Based on the results of a survey conducted by the Human Capital Division in 2008 and 2009 at Bank Syariah X, the criteria for employee satisfaction with the Human Capital Division are in the criteria of "Fairly Satisfied". This shows that the role and function of Human Capital Division is not yet optimal.
The survey results on the Human Capital Division service show that the service satisfaction index decreased by 5.76%. This is because the Human Capital Division does not focus on service and employee satisfaction. Meanwhile, customer satisfaction did not increase, or in the category of "fairly satisfied". So, it can be concluded that if the Human Capital Division does not show improvements to services, it will have long-term consequences, especially with the existence of errors in service procedures that result in fraud.
The survey results on the Human Capital Division service show that the service satisfaction index decreased by 5.76%. This is because the Human Capital Division does not focus on service and employee satisfaction. Meanwhile, customer satisfaction did not increase in the category of "quite satisfied". So it can be concluded that if the Human Capital Division does not show improvements to services, it will have long-term consequences, especially with the existence of errors in service procedures that result in fraud.
The effect of fraud is not felt in the short term because fraud will be known precisely after the next few years, such as fraud cases that appeared in 2010-2013. The cause could also be from Human Capital Division services that were not maximized in 2008. Fraud will be revealed after the company conducts an internal audit, in which the fraud cases are finally found.
So, Human Capital Division programs must be designed by taking into account the facts of business processes in the field so as to create fair policies.

Internalization of the Reinforcement of Anti-Fraud Culture and Doctrine at Islamic Bank
Anti-Fraud culture and doctrine reinforcement programs must contain the values of transparency, independence, accountability, responsibility and fairness through various socialization programs to all levels of the bank structure. The description of the principles of good corporate governance has been carried out, among others, by including these values into the Islamic Bank's Vision and Mission, Good Corporate Governance, and Code of Conduct so that the policy of antifraud culture and doctrine reinforcement runs optimally. Furthermore, after being implemented thoroughly, the work productivity of employees will increase by itself.

Scheme of the Role of Role Model and Human Capital Division in the Prevention of Fraud in Islamic Banks
Explanation of the process of Human Capital Division steps and organizational culture reinforcement programs in the prevention of fraud.

CONCLUSION
The development of Islamic Bank X needs to be encouraged, especially in fraud prevention. So, organizational culture and anti-fraud doctrine must be reinforced in all levels of organizational structure, from top to bottom. Each head of work unit (leadership) is automatically responsible and becomes a role model for his subordinates. In addition, it should be strengthened by the support from the leader through Human Capital Division policies that favor employee welfare.