Unanimously approved by the Board of Directors of the Financial Services Roundtable, a non-profit consortium of 100 of the largest U.S. financial institutions.
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Internal Fraud Prevention service
Financial Services Organizations
The Internal Fraud Prevention service helps identify job applicants and employees who were released by another financial services organization because they knowingly caused or attempted to cause financial loss.
How it Works
Applicant information is compared to a shared database containing records of individuals who have committed or exhibited intent to commit fraud, theft or other act as specified in the Operating Rules including stealing funds and/or selling client data.
These records are contributed through human resources, corporate security, risk management or other functional areas.
Released employee records fall into one of the following event categories:
- Bank Secrecy Act violation
- Bribery/gratuity
- Payment instrument fraud
- Loan fraud
- Defalcation/embezzlement/theft
- Computer intrusion
- Forgery
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- Identity fraud and theft
- Misuse of position
- False statement
- Securities fraud
- Commodity futures/options fraud
- Mail fraud
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In addition to providing immediate responses, the service provides supporting data such as contact information for the contributing institution.
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.
For more information on the Internal Fraud Prevention service, please Contact Us.
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