Internal Fraud Prevention service

Financial Services Organizations

Insider Fraud: An Industry Wide Problem

Internal or insider fraud perpetrated by employees is a pervasive and costly problem for the financial services industry.

• Javelin Strategy and Research indicates that 15% of information breaches are the result of corrupt business employees in their 2006 Identity Fraud Survey Report.
• The Association of Certified Fraud Examiners has reported a median loss per fraud incident of $258,000 in their 2006 Report to the Nation on Occupation Fraud & Abuse (specific to the banking/financial services industry).
• In a 2005 Celent study, surveyed risk managers reported that on average, 60% of bank fraud is committed by insiders.

A Partnership with BITS

Having conducted extensive research on the feasibility of a shared database to store and exchange fraudulent employee information, the BITS Fraud Reduction Steering Committee and the BITS Shared Database Working Group chose Early Warning Services to build and manage this service. Both of these organization’s members are among the most senior fraud prevention and risk management experts in the financial services industry.

BITS is the Technology and Business Strategy Group of The Financial Services Roundtable. To learn more about BITS, visit their web site at www.bitsinfo.org.

The Competitive Difference

Early Warning maintains a common platform and safeguards the National Shared Database to allow financial services organizations to contribute and share information for the purposes of detecting, preventing and deterring fraud. Unlike other fraud prevention services, Early Warning serves in a Trusted Custodian role. In this capacity, the database is governed by a set of strict Operating Rules, created and adopted by financial institutions, which clearly define acceptable criteria for contributed fraud and account abuse data. Early Warning also supports consumers' rights to dispute and correct inaccurate or incomplete information furnished to Early Warning in accordance with the Fair Credit Reporting Act (FCRA).