Pub. 4 2015 Issue 5

Call KBS (785) 228- 0000 to discuss this article and other loss prevention topics or products to help protect your bottom line. twitter.com/kbsforbanks linkedin.com/company/kbsforbanks Subscribe at http://tinyurl.com/kbssubscribe A few years ago while visiting a bank, I noticed a sign posted on the employee bathroom mirror that read: In discussing this with the banker, he explained that the sign had been in place for two years and a total of four incidents had been reported to the attorney. The employees who reported these transactions were informed of the results of the investigation and thanked. The bank also used the reports as an opportunity to improve training and communication practices. While three of the incidents were found to be legitimate, the fourth incident resulted in the uncovering of dishonest acts by a loan officer. The quick report of the activity prevented a serious loss from occurring. The loan officer was fired and faced criminal charges. The Association of Certified Fraud Examiners reported in 2014 that 40% of all occupational fraud is detected through tips. However, this number drops to 33% if we look at organizations without hotlines, and jumps to 51% if we consider only organizations with hotlines. Providing employees with resources to share their suspicions discretely and without judgment goes a long way to help in identifying suspicious activity. Steps your bank may take include: Strong protocols in place to ensure proper practices Reinforcing employee adherence to procedures and protocols Implementing a confidential outlet where employees can feel safe to report concerns and suspicions Have management shadow employees to better get an understanding of day-to-day activities, and to identify vulnerable gaps in their process While it’s easy to focus on the act of fraud and those that are caught committing these acts, it is important to remember that the causes and opportunity for fraud can be systemic and cultural. Remember: creating an environ - ment that fosters open communication, professional skepticism, and adherence to procedures and protocol not only encourages ethical behavior among employees, it can also help protect your bank from internal fraud. Connect with us on social media: Gain access to enhanced KBS content: 40 % of all occupational fraud is detected through tips. This statistic jumps to 51 % if we consider only organizations with hotlines. PROTECT THE BANK AND ITS CUSTOMERS. Unethical and illegal acts can have serious consequences for the Bank and its customers including financial loss, liability, loss of reputation, etc. If you witness or suspect any unethical or illegal behavior, don’t ignore it. You have an obligation to report any and all known or suspected unethical or illegal behavior. When you are not comfortable or it’s not possible to report your concerns to senior management, please call Attorney Jxxxx Rxxxxx at (###) ###- ####. All information reported is strictly confidential and very much appreciated. Please join us in doing what is right.