Jul 16, 2013 Dave King
Data breaches and information loss have become more common in the past several years, especially as financial records move into digital formats. Businesses and financial institutions alike need to implement substantial and comprehensive information governance standards and maintain strict oversight of ACH cards and other wire transfers to avoid serious repercussions.
The Credit Union Times recently reported that internal threats have become more common among financial institutions in the United States and abroad. Several studies conducted throughout the past decade have shown that a massive rate of data breaches and subsequent financial loss occur as the result of either purposeful or accidental actions of employees.
According to the news provider, employee fraud schemes were found by one risk management study to cost financial institutions an average of $140,000 per event. These types of financial losses are often just as devastating - if not more so - for businesses that experience data breaches or suffer from internal theft.
The source explained that financial institutions also struggle to detect internal fraud schemes, with the average length of an event hitting 18 months before being identified. Long term instances of financial fraud, especially those carried out through electronic payments systems such as ACH cards and automated wire transfers, tend to be the most harmful.
Enterprises and financial institutions need to ensure that all automated transactions are monitored regularly and diligently. Though automation can improve the efficiency of accounts payable and receivable, it does not replace the need for continued oversight of payments, as hackers will specifically target these types of accounts in the hopes of not being detected.
With strong data security software and trusted members of staff overseeing accounts payable and receivable transactions, enterprises can avoid the financial loss and hurt reputations that come along with internal fraud.