Insider and Employee Fraud
Identify unusual behavior for high-risk transactions before the insider or intruder disrupts your business.
Drawing on primary and secondary research, we've summarized the current insider fraud threat landscape with valuable input from senior banking professionals to understand its consequences for banks, and the best strategies to respond to the challenge.
Here's a snapshot of the findings
74% are concerned about insider fraud and collusion risks to their organization.
This figure is especially surprising when compared to the fact that
29% don't know if they've been a victim of insider fraud in the last 2 years.
For banks globally, Covid-19 and the mass shift to remote working have created the highest rates of insider fraud in recent history, calling for long-term strategies to address the threat landscape.
75%
agree that COVID-19 has increased the risk of insider fraud and collusion.
100%
are also concerned about employees breaching data protection laws
77%
agree that employee WFH has increased the risk of insider fraud and data leakages.
Although insider fraud is typically linked to financial theft, it is not the only threat worrying organizations
The Fraud Triangle
A trifecta of rationalization, opportunity and pressure
The pandemic has exacerbated many drivers of the Fraud Triangle, creating a perfect storm of conditions for insider fraud.
Rationalization
A lack of company loyalty and harbored frustrations with leadership stemming from a poor company culture may heighten internal fraud risks through rationalization.
Opportunity
The lack of direct supervision has introduced new barriers to monitoring employees
40% reference the lack of end-to-end visibility as a challenge in insider fraud and collusion detection.
Raising concerns as 52% of fraud cases are discovered by employee whistleblowing.
Proximity-based detection, such as whistleblowing, is unreliable in today's work from home and hybrid environments
Pressure
Many companies are demanding their employees deliver ambitious targets and meet bonus thresholds, pushing employees to take desperate measures to fulfill company demands
26% saw financial strain and uncertainty as key in driving the increase in fraud under Covid-19.
Consequences of Insider Fraud
Here's how our survey respondents ranked insider fraud consequences from most to least concerning
The consequences are diverse and impactful, explaining why
15% plan to invest in automated insider fraud management solutions in the next two years. However, despite the catastrophic damage insider fraud can cause.
60% were unsure of their organization's plans to invest.
Best practice
There's no silver bullet; instead, insider fraud mitigation efforts must be layered with several different techniques.
73% said a combination of tools – including artificial intelligence/machine learning, network analytics, and network monitoring is best.
In addition, here are two key considerations to bear in mind when approaching insider fraud strategies.
1 Improve company culture & awareness around insider fraud
Promote a culture of open conversation about fraud risks and reward good practices.
2 Prevention is detection
Often, organizations operate reactively, but when it comes to insider fraud, the best strategies pursue prevention through strong detection, 74% value solutions that detect insider and other types of fraud.
Detection solutions are essential to avoid the cumbersome investigation period when fraud is suspected. 90% agree that investigating insider fraud and collusion isn't straightforward because each case's circumstances differ.
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