Your employees play a powerful role in fraud detection and prevention at your bank. However, that doesn’t necessarily mean they are assets in the fraud prevention process. They can help to reduce fraud at your financial institution, or they can increase your risk. It all boils down to training.
When you implement an effective fraud awareness and prevention training program, you can leverage the full capabilities of your team to significantly reduce fraud at your organization. Wondering how to get started? Check out these tips.
1. Train employees about the different types of bank fraud.
Your employees cannot monitor and protect your bank from threats that they don’t understand. Make sure that your employees understand the many types of fraud that face financial institutions. That includes check fraud, debit and credit card fraud, loan fraud, new account fraud, and account takeover fraud. You should also cover the intersection between identity theft and bank fraud, and you should help them understand the different ways that thieves carry out different types of fraud.
2. Segment training efforts for different employees.
Different employees are likely to encounter different types of fraud, and rather than giving everyone a one-size-fits-all training, you should customize training procedures to each person’s unique role. For instance, tellers should learn about deposit account fraud, while loan officers should focus on loan fraud.
The customer service reps in your call center should be well-versed in the signs of identity theft and account takeover — remember fraud doesn’t always originate at the point where money exchanges hands. By stopping a thief from taking over someone’s account, you can prevent losses from occurring
3. Include IT threats
In addition to covering the traditional types of bank fraud, make sure that you talk about IT security. All businesses are susceptible to cyber threats, but due to the type of information they have, banks face a heightened risk.
Your employees should understand best practices in cybersecurity such as signing out when not using a device, using multi-factor authentication, and changing their passwords regularly. Beyond that, they should understand how to detect and avoid phishing emails. In addition to training, you should send phishing emails to make sure that your employees are utilizing their training. Then, if someone fails the test, you know where you have to bolster training efforts.
4. Cover internal fraud risks.
A significant part of your fraud prevention training will focus on external threats, but the education can’t stop there. You need to address internal fraud risks. According to the U.S. Chamber of Commerce, 75% of all employees steal at least once from their employers, and half of these employees (so over a third of all employees) do it more than once.
When approaching this threat, make sure to discuss how internal fraud affects everyone. Your employees need to understand that internal fraud doesn’t just affect your profits, it also affects their salary and work environment. In addition to educating your employees about this type of fraud, also work to create a culture of trust and respect. Employees are often less likely to steal when they feel like part of the team.
5. Have an established process for reporting fraud
You should have an established process for reporting all suspected fraud, and your employees should understand how to use this communication channel. For cases of internal fraud, you may need to offer an anonymous reporting option.
6. Focus on classroom training.
Instructor-led classroom-based training tends to be the most effective. It allows your employees to ask questions and give you feedback about the training process. Having an in-person instructor also ensures that your employees cover everything and that they don’t rush through the learning materials. Additionally, it’s easier to incorporate role-playing exercises and games into classroom-based lessons, and these learning methods help the material to stick.
However, if that is not possible, you may want to explore self-guided study materials or pre-recorded video sessions. This can be helpful if you can’t coordinate employees’ schedules or if you want to create training modules for onboarding new employees.
7. Get management involved.
Make sure that your management team attends training sessions as needed. This helps them learn more about fraud, but it also shows the rest of your team that fraud and security are an important part of your corporate culture.
Management needs to be aligned with your anti-fraud efforts because they need to understand the importance of funding anti-fraud activities. Additionally, when management prioritizes anti-fraud activities, your staff will see that and they will also follow through. In contrast, if management isn’t aligned with your anti-fraud efforts, your staff may stop taking the risks seriously.
To give you a very simple example, imagine that a manager works the teller line during staff lunch breaks. They know a lot of your “regulars” so they skip routine procedures such as checking IDs or looking at endorsement lines. If staff see this, they will likely follow suit.
8. Cover constantly evolving risks.
Your team can’t just go to fraud training once. They need to be reminded of the most prevalent threats, and they need to be informed about evolving threats. To do this, you should consider working with a fraud detection team that uses cyber threat intelligence to learn about the newest threats.
9. Train your team on fraud detection tools.
Finally, make sure that your employees understand how to use your fraud detection and prevention tools. Train them when you implement the tools, but also check in on a regular basis to ensure that they are optimizing these tools to their full potential.
Fraud detection and prevention require strong tools that can scan transactions in real-time and look for signs of fraud. But it also includes a strong, well-trained team that understands the risks, how to spot fraud, and how to mitigate it quickly and efficiently.
At SQN Banking Systems, we can help you bring these elements together. We offer a range of fraud detection and prevention tools, but we also can do a thorough analysis of your current fraud workflows to help you see where you need to improve the most.