I’ve conducted this exercise with hundreds of professionals over the years.
Board directors. Compliance officers. Risk managers. Internal auditors. Bankers whose careers revolve around preventing fraud.
The outcome is remarkably consistent.
Most people get it wrong.
And that’s not because they lack intelligence or experience. It’s because of a cognitive blind spot that fraudsters exploit every single day.
Ironically, one of the most valuable lessons I’ve learned about fraud didn’t come from a textbook or a financial institution. It came from studying fraudsters themselves.
Recognition Is Not the Same as Understanding
One of the biggest mistakes professionals make is believing that familiarity equals knowledge.
We assume that because we see something every day, we understand it.
But that’s rarely true.
Psychologists Leonid Rozenblit and Frank Keil described this phenomenon as the Illusion of Explanatory Depth. It’s a cognitive bias where people believe they understand something in far greater detail than they actually do.
Think about everyday objects.
You probably use a zipper multiple times a day.
Could you explain exactly how it works?
You drive a car.
Could you describe every step of how the anti-lock braking system functions?
Most people can’t.
We recognize these things. We don’t necessarily understand them.
The same principle applies in fraud prevention.
The Advantage Fraudsters Have
Contrary to popular belief, successful fraudsters are not always more intelligent than the people trying to stop them.
What often makes them successful is something much simpler.
They pay attention to details that everyone else overlooks.
While legitimate professionals rely on routine and familiarity, fraudsters study systems with curiosity.
They ask questions like:
- Where is the weak point?
- What assumptions does this process rely on?
- Which security feature is checked—and which one is merely assumed?
- Which verification steps are performed consistently, and which are skipped under pressure?
- What does everyone think they understand, but rarely examine?
That difference in mindset creates opportunity.
Professionals often work from recognition.
Fraudsters work from understanding.
And that small difference can have enormous consequences.
A Simple Exercise That Reveals a Bigger Problem
Here’s a question I’ve asked countless audiences.
It sounds easy.
In fact, most people answer confidently.
Without searching online or checking your wallet, answer this question:
What image appears on the back of a Malaysian RM100 banknote?
Take a moment.
Don’t cheat.
Most Malaysians handle banknotes almost every day.
Bank employees process hundreds or even thousands of notes.
Surely this should be easy.
Yet surprisingly, many people—including experienced banking professionals—cannot answer correctly.
Why?
Because they’ve seen the note countless times.
But they have never truly looked at it.
Recognition has replaced observation.
Why This Matters in Fraud Prevention
This isn’t really a test about currency.
It’s a test about attention.
Fraud investigations repeatedly demonstrate that criminals succeed because they notice details others ignore.
They study authentication features.
They understand printing techniques.
They examine verification procedures.
They identify behavioural patterns.
They observe human shortcuts.
In many cases, they don’t defeat sophisticated security systems.
They defeat human assumptions.
When people become overly familiar with a process, they stop actively observing it.
Routine creates confidence.
Confidence creates complacency.
Complacency creates vulnerability.
Fraudsters understand this better than most organizations realize.
The Human Factor Is Often the Weakest Link
Organizations spend millions on technology.
Artificial intelligence.
Machine learning.
Fraud detection software.
Identity verification.
Transaction monitoring.
These tools are essential.
But technology can only go so far if the people operating it fall into cognitive traps.
The Illusion of Explanatory Depth affects everyone.
Executives.
Investigators.
Compliance professionals.
Bank tellers.
Security officers.
Auditors.
Even experienced fraud examiners.
Simply knowing that a process exists is not the same as understanding how it can fail.
How Fraudsters Think Differently
One of the reasons I spend time interviewing offenders is because they reveal something many organizations never consider.
They approach systems differently.
Where employees ask,
“How do I follow this process?”
Fraudsters ask,
“How can this process fail?”
Where organizations focus on compliance,
Fraudsters focus on exceptions.
Where professionals trust routines,
Fraudsters question routines.
That mindset allows them to identify weaknesses long before organizations do.
Building Better Fraud Awareness
Effective fraud prevention isn’t just about teaching employees what to do.
It’s about teaching them how to think.
Organizations should encourage professionals to:
- Challenge assumptions rather than accept familiarity.
- Slow down when reviewing routine processes.
- Look beyond checklists and understand why controls exist.
- Regularly test their knowledge instead of assuming competence.
- Think like an adversary when evaluating systems and procedures.
The goal isn’t paranoia.
The goal is awareness.
Because awareness creates resilience.
A Question Worth Asking Yourself
Here’s the challenge again.
Without looking it up…
What image appears on the back of a Malaysian RM100 note?
Whether you know the answer or not isn’t the most important part.
The real question is this:
If you’ve handled hundreds—or even thousands—of RM100 notes and still couldn’t answer with confidence, what else are you seeing every day without truly observing?
That question extends far beyond currency.
It applies to fraud controls.
Security procedures.
Compliance processes.
Risk management.
And everyday decision-making.
The biggest vulnerabilities are often hiding in plain sight—not because they’re invisible, but because we’ve stopped paying attention.
Fraudsters haven’t.
That’s why they sometimes stay one step ahead.
The good news is that they don’t have to.
The moment we move from simple recognition to genuine understanding, we begin to close the gap that fraudsters rely on.
And in the fight against fraud, that shift in mindset can make all the difference.