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How to Create a Culture That Reduces Internal Theft and Fraud

by : Stan Jaslar

In 2015, a bank teller in White Plains, New York was at the helm of a group that stole $850,000 from multiple bank accounts. Two Chase bankers in Brooklyn took almost $400,000 from customer accounts, and a teller in Chicago took nearly $2 million.

While banks seem to focus most of their anti-fraud efforts on debit card fraud, check fraud, and cyber threats, the real threat is often right in front of them—their employees. In fact, the Manhattan prosecutor’s office brings a case against a bank teller once a month in just that borough.

To protect your bank, you need to screen employees, but you may also want to explore other ways to create a culture that reduces internal theft and fraud.

Consider Increasing Wages

While you can’t boil everything down to wages, employees who are paid more are often more loyal to their employers. On the flip side, employees who don’t earn enough may be more susceptible to bribes. According to the Bureau of Labor Statistics, the median annual income for a bank teller is $27,216 as of 2016. You may want to keep that number along with the cost of living in your area in mind as you set wages.

Use Checks and Balances

To be on the safe side, try to involve two people in every possible transaction. When someone handles a transaction over a certain threshold, have them run it by another employee. Note that you need to change the thresholds on a regular basis or do spot checks—if you don’t, unscrupulous employees will find ways to work around your system.

Create a Culture of Accountability

That said, there are a lot of situations in the banking industry where it’s not reasonable to have two people involved. To deal with this threat, you may want to develop a culture of accountability. For example, consider using OKRs. Short for objectives and key results, OKRs let you and your employees set individual and company-wide goals, which you track publicly.

Ideally, the goals should be quantifiable, and they may include anything from opening x number of accounts next quarter to improving customer reviews by x percentage. Regularly review progress on each goal and assign a rating accordingly.

For instance, Google uses a 0 to 1 rating. A 0.7 means you’ve gotten close to the goal, while a 1 means you hit it out of the park. This method can be useful for measuring progress, setting new goals, and finding weak areas. Beyond that, it builds accountability. When employees have an ingrained sense of accountability to you, themselves, and the company, they are likely to perform better and be more honest.

Get to Know Your Employees

Talk with your employees or instruct your management crew to get to know the people they are managing. There are often signs that someone is stealing or thinking about defrauding a company. For example, if you find out that an employee is having financial troubles, you may want to keep a closer eye on transactions that they handle. An employee who is constantly angry at the company may be considering theft as retaliation. A few simple conversations can help you identify and mitigate potential risks.

You can create a culture that helps to reduce fraud, and we can help with the tech tools. At SQN Banking Systems, our motto is to make fraud protection simple. Contact us today to learn more about our services.




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