Insider Fraud Is Involed in 60 Percent of Data Breaches

Insider fraud accounts for approximately 60 percent of bank fraud cases in which a data breach or theft of funds has occurred, according to a new report by Celent. "While consumer fraud is an extremely important issue that must be addressed, its effects pale in comparison to the consequences of internal fraud," the report notes.

"Employees and insiders have the potential to devastate a bank," Celent adds. As such, banks should step up internal fraud prevention, which includes adopting technology solutions that include customizable business rules, an alerts engine, detailed reporting, predictive analytics and an intelligent dashboard, the Boston-based firm advises.

Despite the danger from rogue employees, Celent estimates that up to 50 percent of all insider fraud incidents go unreported. According to the report, financial institutions hesitate to formally communicate internal fraud for reasons including concern about the bank's image and a loss of customer confidence.

Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio