Financial institutions can occasionally fall prey to dishonest employees, especially if their internal control system is not robust enough. This can result in substantial financial losses as well as irrevocable reputational damage.
Concrete steps which financial institutions can take include, but are not limited to:
Applying due diligence in the screening of both future employees and customers.
Ensuring that access and/or identification cards of employees cannot be replicated or tampered with.
Providing access to relevant information about financial products and services, including risks, to both employees and customers
Developing a risk management and fraud strategy, including policies, personnel and processes to manage fraud.
Installing a confidential hotline for employees to report cases of dishonesty at the workplace and for the public to report cases of fraud or other grievances.
Providing regular training to staff to ensure that they are aware of procedures and processes within the institutions
Ensuring regular rotation of staff across departments and positions to detect irregularities.
Inculcating a culture of compliance at all levels of the institution.
Periodic review of IT systems and controls to ensure that they are secure and reliable.
Carefully considering the risks involved in outsourcing activities