How User Access Monitoring Can Play a Key Role in Banking Internal Fraud Detection and Prevention

Staff fraud is one of the most expensive liabilities of financial institutions. ACFE (Association of Certified Fraud Examination) has reported year after year that companies lose, on average, five percent, almost $73bn, of revenues due to employee fraud.

Some of the internal fraud schemes in the banking sector include: Transaction Reversal, or theft from customers, Credit abuse, IT Changes at the back end, money laundering, procurement fraud, trading fraud, expenses and payroll, and data theft.

Staff with IT administrator privileges can play a key role in internal frauds, for example by granting administrator rights to non-IT staff for just long enough to allow them to approve a fraudulent transaction.

A recent report of NetGuardians has stated that Privileged IT users working on the core banking system can be very difficult to monitor without specialist software tools. They have a lot of opportunity to make changes on the system that could lead to frauds, such as:

DataGear is developing an artificial-intelligence-based internal fraud detection and prevention technology. This technology covers multiple schemas including the IT users behaviour monitoring and relies on in-memory data storage to process and analyze transactions more quickly. By keeping the lists of rules about potentially fraudulent behaviour in-memory instead of requiring the system to query the database for each transaction, this technology enables its risk management teams to correlate more data against staff behaviour in order to reduce time-to-detection and minimize losses due to fraud.

User Access Monitoring is critical and must be considered when building or adopting any fraud detection and prevention solution.