According to the results of Actimize's 2007 Employee Fraud survey, which was managed by Infosurv, an independent research company, financial services institutions know that they have a significant and growing problem with employee fraud and are not fully prepared to handle the threat as attacks from organized crime, dissatisfied staff and financially distressed employees become more sophisticated.
Employee Fraud within Financial ServicesAn independent study initiated by Actimize, Inc
July 2007
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Executive Summary
ccording to the results of Actimize's 2007 Employee Fraud survey,which was managed by Infosurv, an independent research company,financial services institutions know that they have a significant andAgrowing problem with employee fraud and are not fully prepared to handle thethreat as attacks from organized crime, dissatisfied staff and financially distressedemployees become more sophisticated.
The responsibility to investigate employee fraud varies greatly across organiza-tions, as does the availability of crime-fighting tools to fraud analysts and investi-gators. While protecting customers and the reputations of the firms are a top pri-ority for organizations, most are not yet using automated detection technologiesto defend themselves.
An independent study initiated by Actimize, Inc July 2007
2Growing Financial Services Employee Fraud Problem
raud strategists, analysts and investigators have known a case of data theft in the last 12 months. Twenty per-for a long time that employee fraud is a significant and cent of respondents didn't know if their organizationgrowing threat. Across a range of financial institutions had experienced data theft in that period.aFnd roles, those on the front line report that the serious prob-lems such as data theft, account takeover and embezzle- The average "largest employee fraud" uncovered inment are not yet under control. The problem is pervasive, the last five years was $874,961 USD, while the singleand it is becoming more complex. largest reported was $6,000,000 USD.
Sixty-five percent of financial institutions see the threat When asked an open question about the future, theof employee fraud increasing and 77 percent think the majority of those who answered predicted an increasenature of the threat is becoming more sophisticated. of infiltration of organized crime groups and more cus-tomer identity theft.Eighty-five percent have been somewhat to extremelyimpacted by employee fraud in the past three yearsand of those that knew, 50 percent said they have had
How Ready is the Industry?
s with other fraud problems that the financial industry Half of the respondents said that their organizationshas tackled in the past, the problem is often allowed detect or catch 50 percent or less of all employeeto grow significantly before a consistent set of solu- fraud committed. Respondents were least prepared totAions is deployed to control it. The industry today is still in an detect identity shielding, which happens when oneearly phase of confronting the employee fraud problem; but employee spreads fraud across multiple users by sign-the industry is emerging from an "early adopter" phase with ing in with other employees' information, with 27.5 per-7.5 percent of respondents having adopted third genera- cent not ready to address it at all.tion, automated or analytics-based solutions to bringemployee fraud under control. Respondents cited data availability/access, resourcepriorities, understanding the problem and limited tech-Seventy-two percent rate the finance industry's readi- nology infrastructure as the top challenges to manag-ness to tackle the employee fraud problem as "poor" ing employee fraud.to "somewhat acceptable", while respondents rankedtheir own organization's ability to tackle the problem Nearly 70 percent of respondents said that govern-only slightly higher, with 40 percent rated as "accept- ment regulation or standards regarding employeeable", "good" or "excellent". access to customer accounts and data would hindertheir company's ability to detect or prevent employeefraud.
3Employee Fraud within Financial Services
Why is Employee Fraud Such a Problem?
espondents to the survey came from a broad range of Respondents point to the accessibility of technology,roles throughout the organization; th... [download for more]
