The Inside Story:
Fraud from Within
The fear of fraud is a constant. Unfortunately, now more than ever before, fraud is being committed by employees on the inside, the very people who are supposed to be supporting and protecting an organization.
Fraud from Within
Even though the financial industry is one of the most regulated, financial institutions are still getting hit with the highest rates of internal fraud.1 And it’s not just the big guys, it’s everyone from the largest to the smallest.
23% of financial fraud cases cause over $1 million in losses.1
Of all convictions related to financial institution fraud are bank insiders.3
Financial institutions have the highest rates of internal fraud.
Unfortunately, it’s hard to predict who might commit fraud at an organization since a vast majority of perpetrators are first time offenders.1
79% of perpetrators display behavioral warning signs, most common are:
- Living beyond means
- Financial difficulties
- Unusually close association with a vendor or customer
- Excessive control issues
- A general “wheeler dealer” attitude involving unscrupulous behavior
- Recent divorce or family problems.1
There’s no typical face of internal fraud – it can be perpetuated by anyone.
There’s simply more data out there ready to steal and more avenues available to access it.
Of employed adults use at least one personally owned electronic device for work.5
Of organizations that have experienced a data breach due to unsecure electronic devices.5
Of organizations say they’re “fully aware”of all the devices accessing their network.5
Sharing data online is estimated to grow 10-fold, increasing the chances of data being compromised.1
The Investigative Approach
Insider fraud is a serious problem, but there are ways financial institutions can detect and prevent it.
Of all inside fraud at financial institutions is discovered through an employee tip.1
Of all tips were delivered via telephone hotlines, while 34% were sent via email. 1
Organizations that have anti-fraud controls in place detect fraud 2x more quickly than those who don’t, and report lower average lower fraud losses.1
By having multiple anti-fraud programs in place, organizations can reduce inside fraud.
First Data partners with financial institutions to manage transactions more efficiently, strengthen customer privacy protections and reduce fraud losses. Our security and fraud solutions not only help protect against data exposure; they also help you detect fraud earlier to give your institution a competitive edge.
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