Bank Fraud Management – 2

The critical success factors which are very common to all Fraudsters, which will be explained below, are “speed, cash, fear, trail and illusion that they will not be caught”.


Bank Fraud Management – 2

Fraud’s Critical Success Factors

The critical success factors which are very common to all Fraudsters, which will be explained below, are “speed, cash, fear, trail and illusion that they will not be caught”.  If these criminals put as much efforts in good cause as they put in crime they stand a better chance of being successful than they usually think.  Let us examine the factors that Fraudsters consider to be essential for their success and what organizations can do to mitigate them:


  • Need for Speed


Fraudsters are usually in a hurry just like other Criminals – speed is important to them.  Subject to the type of fraud, the planning takes longer time than execution. A Bank that has good internal check and internal control process can easily trap them before the actual execution. They want to operate in seconds especially when those who are watching take their eyes off the ball.  If there is a speed-breaker like in-built checks and controls they will be discouraged. This is the reason why Banks that have weak internal controls usually create conducive environment for fraudsters.


  • Quick cash realization


Cash is important to Fraudsters.  They prefer raw-cash to assets that will require “sale” before cash can be realized.  A fraudster will prefer to steal cash in the Teller’s cubicle than to steal “cash counting machine” that will require looking for a buyer – even if the cash counting machine will give him four times the amount stolen.  Sale of movable items will not only be slow but a trail will be created and in the process of cash and assets exchange the Fraudster may be caught.


  • Fear of being caught


Fraudsters, like other Criminals, are always afraid of being caught or their “cover being blown”.  Therefore, they can go to any length to prevent this but in the process, they leave massive trails that Investigators can use to detect and fish them out.  For example in a bank you can tell when a Staff has no business in your department suddenly without any important official or private relationship becomes friendly and very inquisitive about certain confidential processes.  If you ask such a person why he or she wants to know about how you do your work the answers are usually weak e.g. he could say; “just to educate myself”.  The bank’s standard operating procedure (SOP) is available to him or her but he or she is interested in the practical application to detect and overcome what might cause a barrier to the intended crime.  Watch your tongue when talking to someone whose intention or motive is not clear.


  • Risk of leaving a trail


The risk of leaving a trail is high but Fraudsters have many ways by which they ensure that other people take “the fall for them” which includes using or forging other people’s signature, password, computer terminal, files, office, cubicle, keys and photographs.  By doing all these they will divert the attention of the Investigators away and push the problems on other people, then pretend to be innocent during investigation.  While others are being arrested and sent to the Police Station, they will look innocent, quiet and even sympathetic but inwardly, they are connected to what is happening!


  • Illusion that they will not be caught


Fraudsters and other Criminals always set out with the illusion that they will not be caught.  Most of them hardly think of the high probability that there are greater numbers of Staff who are more intelligent than they are and that it is an illusion to think a crime can go undetected.  It is the mistaken notions that they will not be caught that usually lead them to be over-confident and thus carelessly leave trails that Forensic Auditors use to catch them.  

Causes of Fraud

There are many causes of fraud but we will discuss the following critical four i.e.:


  • Social


The type of frauds perpetrated in our society is due to the high value placed on acquisition of wealth.  People are hardly rewarded for honesty or integrity in our environment.  Some parents do not ask their children about the sudden affluence that they notice.  The Political Leaders also do not show good examples. The Society considers Fraudsters as smart while honest people in public offices are not celebrated.  In fact, they are regarded as slow and stupid.


  • Law enforcement


In Nigeria, the legal provision for fraud control is weak and outdated. Although the law provides for reporting, dismissal, and prosecution of the Fraudsters after trials and convictions, the court process is slow while the penalty is weak.  In addition, our law enforcement agents are not equipped technically to handle ICT related frauds.  Some fraud cases against the “big men” in the country have been in court for over ten years! That type of justice will always encourage Fraudsters.


  • Management


In some Banks the recruitment of staff are not rigorous.  They are based on “tribe, ethnic, friendship, old boys, club members and others.”  No rigorous integrity or background checks. In addition, the top Management does not consider the danger in offering low remuneration package to their Staff who will be handling cash daily. Other issues include neglect of training, reconciliation, call-over, hiring of casual staff and application of cheap computer software.



  • Personal


Due to weak moral upbringing, there are some people that will steal even if they have everything.  But they are few.  This is based on either natural or cultivated habits that they have imbibed over a long time.  

Wrong choice of friends and inordinate ambition to become rich can also force an individual to perpetrate fraud – if he or has the opportunity.

To be continued

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