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Internal Fraud in Banks

Banks are so secure and tightly controlled that they never have theft problems . . .WRONG! The potential for internal fraud in banks is very real. Three examples of internal fraud in banks:

No matter how secure you perceive your bank’s operation—there is always the possibility of these types of crimes. Unfortunately, most bank officials rarely consider the possibility of internal fraud in banks. Such crimes are preventable and you can reduce your risk by:

1) Recognizing the Threat: Internal fraud in banks is a real possibility. The employee most likely to commit internal fraud in a bank frequently holds a position of trust, has greatest opportunity, is least suspected, and has little or no supervision.

2) Recruiting Process: Controlling internal fraud in banks begins at the point of hire. Reduce your risk by conducting comprehensive background and credit checks.

3) Multiple Tasking: Reduce your risk by ensuring that no single employee has the ability to affect every stage of a critical work process. For example, the employee who handles customer accounts should not be able to make adjustments, or transfer funds between accounts without second person confirmation.

4) Supervisory Oversight: Proper oversight and monitoring help to ensure that sufficient financial controls are in place and enforced.

These “four steps” will help to deter internal fraud in banks.

To learn much more about internal fraud in banks, order your copy of Business Fraud: From Trust to Betrayal today!