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Employee Fraud Not Being Properly Addressed By Financial Industry, Government, Survey Says

Actimize survey cites increased access to technology, poor hiring and organized crime as drivers for employee fraud. Majority of those surveyed say the financial industry and government are not doing enough to tackle the problem.

Financial institutions widely believe employee fraud to be driven by increased access to technology, poor hiring and screening practices, and organized crime, according to a new survey sponsored by Actimize, a provider of transactional risk management software for the financial services industry. But while 85 percent of respondents reported that their companies have been affected by employee fraud, nearly 70 percent said government regulation or standards regarding employee access to customer accounts and data would hinder their companies' ability to detect or prevent employee fraud.

Further, while more than half of the survey respondents said they believe only half (or less) of the employee fraud occurring at their institutions is being detected, 65 percent expect the threat to increase. In addition, more than three quarters of respondents see employee fraud as becoming more sophisticated and 73 percent rate the finance industry's readiness to tackle the employee fraud problem as poor to somewhat acceptable.

Half of those surveyed said they have had a case of data theft in the last 12 months and their average "largest employee fraud" incident uncovered in the last five years was $874,961. The single largest theft reported was $6 million.

The survey, which was managed by independent research firm Infosurv, included 40 responses from financial institutions in the U.S. and U.K., more than half of which had more than $30 billion in assets. Fifty-five percent of participants specialized in fraud prevention/loss management and IT/information security at their companies.

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

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