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Protect Your Financial Institution from Employee Theft

In a financial institution, employee theft is always a concern and that risk is amplified by the current state of the economy. Normally honest employees may resort to theft if they are facing tremendous financial burdens at home. Employees may also be motivated to steal if they were given extra responsibilities after others were terminated without an increase in compensation. It is important that you recognise this risk so that you can take action to prevent it.

Of course, with employees handling financial transactions, there is always a concern for embezzlement. However, a growing problem among financial institutions is employees taking advantage of their access to sensitive customer information.

 While the ideal solution would be to limit access to that information to as few employees as possible, this is often impractical while also striving to deliver the best customer service possible. In addition, employees with access to the internet may use company time to handle personal business or surf the Web, which is known as time theft.

Protect Your Financial Institution from Employee Theft

Tips to Prevent Theft

To prevent theft at your organisation, consider the following safeguards:

  • Communicate with your employees about the economy and how it will affect your organisation. Be open and honest, but discourage them from panicking.
  • Try to maintain a positive work environment even during tough times. Encourage open communication, listen to employees’ ideas and recognise employee achievement.
  • Educate your employees about what is considered fraud and the consequences associated with it, and emphasise that the company has a zero tolerance policy.
  • Conduct more internal audits, both of your overall financials and of individual employees’ daily transactions.
  • Increase company oversight by upper management and owners.
  • Consider using a payroll service to ensure accuracy.
  • Purchase employee dishonesty liability insurance.
  • Consider installing surveillance equipment. Be mindful that this may decrease employee morale if they feel that they are not trusted.
  • Monitor computer activity more closely, including who has access to sensitive information and whether that access is necessary for their job.
  • Upper management may consider taking a pay decrease or not receiving bonuses, so that lower-level employees see that everyone in the organisation is affected by the economy.
  • Try to split up financial responsibilities among different employees when possible. One person should not have too much control.
  • Try rotating duties regularly and conducting frequent double checks on the books.
  • Encourage employees to use their holiday time. If someone is stealing, it may become more evident once they are away for a few days.
  • Establish a fraud hotline for employees to report suspicious or fraudulent behaviour. Give them the option to call anonymously.
  • Train managers and supervisors to monitor employees and watch for suspicious behaviour. Any suspicious behaviour should be reported and further investigated.

Your financial institution is at high risk of employee theft. Establish safeguards to protect your company.

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