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72% of Banks Say Their Employees Committed Fraud
yahoi writes "The financial crisis appears to be exacerbating fraud by bank employees: a new survey found that 72 percent of financial institutions say that in the last 12 months they have experienced a case of data theft by one of their workers. Meanwhile, most banks don't want to talk about the insider threat problem and remain in denial, says a former Wachovia Bank executive who handled insider fraud incidents at the bank and has co-authored a new book called Insidious — How Trusted Employees Steal Millions and Why It's So Hard for Banks to Stop Them that investigates several real-world insider fraud cases at banks." The article dispels one assumption that might commonly be made about such insider fraud: "Interestingly, it's not the stereotypical offshore or outsourced employee who's most risky to their organizations. Nearly 70 percent of financial institutions say their full-time employees are most likely to pose an insider fraud threat..." Technology workers placed third in the roster of the job categories most abused.
If 72% of financial institutions say they've experienced data theft, how do "most banks" remain in denial? It sounds like "most banks" just admitted it.
Also, I'm not sure data theft is the same as fraud.
Is this really a case of it being unexpected? Banks, which handle lots of money and are generally unwilling to pay for honest talented staff see mishandled cash? What a surprise!
Next article, "Investment Bankers are overpaid for the returns they generate on their transactions!"
"Trust, but verify."
These people are in positions where they have to have access to the information to do their jobs. Locking them down so they can't get to the data without a partner would double labor costs (much more expensive than the 1-4% quoted in TFA.)
So the best answer is: give them the access they need, tell them you're logging it all, log it all, and *analyze the freakin' reports!* There are so many reports out there in most businesses that just get ignored. But we're talking about the early warning signs of theft, and they can't be ignored without consequences.
John
Seriously, if there are humans in involved and money involved, corruption ain't far behind.
www.voiceofthehive.com - Beekeeping and Honeybees for those who don't.
I'm pretty sure that it only the intersection of "actions which are illegal" and "actions which harm the bank's interests" counts as fraud for their purposes...
They're in denial because they are not aware of the full seriousness of the issue.
I discovered something that amazed me. I was trying to resolve a client's quite simple software issue. I worked with managers of two large banks (tens or hundreds of thousands of commercial accounts). I discovered that one of the banks had no technically-knowledgeable employees, except for computer maintenance staff. They used contractors for everything else. The contractors with whom I talked had little technical knowledge.
The other bank had either no one who was technically-knowledgeable or just a few people.
They don't have just have problems with fraud, they have problems in every area where technical knowledge is needed. They cannot resolve modern problems because they have little or no knowledge of them, and they don't want to learn. Technically knowledgeable people are apparently seen as an annoying necessity.
With employees of a third large bank, at which I have personal and business accounts, I found that I could get a laugh by saying I saw their web site and thought that high school students should not write web sites for banks. Later the web site was improved.
I guess it's only fraud when the bank is the one getting ripped off.
When they're handed hundreds of billions of dollars of taxpayer money to shore up bad debt and open up the faucet of commerce, but then instead decide to stop lending and hoard the cash... that's... something else? Right?
If shit gets that bad, I hope you're investing in bacon and not gold.
-The world would be a better place if everyone had a hoverboard
Riiiight. When the government is bankrupt, it _can't_ payout.
If you really believe that the government will falter to such a degree that it will not be able to honor its FDIC obligations, I suggest you remove your funds from your bank, and put them into food storage, ammunition and firearms, and other dystopian future necessities.
Least in the old days you had _some_ assets to cover your debts, and one just couldn't "print" more pseudo-assets.
If you're talking about the dollar being backed by the gold standard, this is just as big of an illusion of security as current paper currency is. The only reason gold was ever considered valuable in the "old days" was due to its scarcity, and relying on an object's absolute physical availability to determine it's value is flawed in an economy of our size. If we tried to back the GDP of countries like the US, Canada, Russia, Europe, etc., with gold we'd have run out of the metal a long time ago.
The funny thing is that gold has only recently become really valuable as a commodity with the advent of integrated circuits and other electronic components that make use of it. If society really does degenerate to the point some people think it will all the gold in the world won't help you. People will need and want to trade for required things like ammunition, canned food, fuels, etc. After that comes the vices such as cigarettes, alcohol, and toilet paper. Gold is going to be waaay down the list.
If you're really worried about money for the post-apocalyptic society of tomorrow, I'd suggest you start collecting bottle caps.
"What do you despise? By this are you truly known." --Princess Irulan, Manual of Muad'Dib
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Actually, it is. When you sell a house to someone with no money, that's fraud. Especially when you know you're doing it.
Also something called "naked short-selling", which involves selling non-existent stock. It happens millions of times per day, everyone does it, and nobody complains. Bear and Lehman stock was counterfeited so rapidly, the stock plummeted to zero within days.
It's the thug life, right? No fraud in the hood. Drugs, guns, murder - that's just recklessness and stupidity.