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ATMIA gives tips for preventing insider fraud

April 9, 2007

LONDON - The ATM Industry Association announced it has published global best practices for preventing insider fraud.

"One of the biggest threats facing financial services today comes from corrupt employees," said Mike Lee, ATMIA's chief executive." Insider collusion, from all rungs of the corporate ladder, now ranks in some countries next to organized crime as the second-largest source of fraud."

According to 2006 Financial Services Authority report, "Firms' High-Level Management of Fraud Risk," insider fraud is one of the most serious threats financial institutions deal with today. And KPMG's annual Fraud Barometer shows organized crime and managers make up the two biggest classes of fraud in the United Kingdom - together the two are to blame for almost 90 percent of fraud cases in the U.K., totaling approximately £14.4 billion (U.S. $24.4 billion) in annual losses.

"Some estimates suggest that over 80 percent of computer-based frauds involve employees," Lee said.

In addition to the financial losses, financial institutions have suffered damage to their reputations. A California bill, which has been adopted by 37 states, says agencies responsible for data-security breaches must notify any individual who may have been affected by the breach. Those types of disclosures have resulted in some big news stories involving embarrassing IT security breaches, Lee said. ATMIA's best practices aim to prevent such damage through the adoption of corporate-wide best practices.

"Tightening recruitment and personnel monitoring practices, internal controls, access security, information security, corporate governance and risk management systems can all provide the industry with a much-needed antidote for this spreading disease of insider fraud," Lee said.

For more information contact Mike Lee.

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ATM Industry Association (ATMIA)

The ATM Industry Association, founded in 1997, is a global non-profit trade association with over 10,500 members in 65 countries. The membership base covers the full range of this worldwide industry comprising over 2.2 million installed ATMs.

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