70% of financial firms hit by fraud

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A recent survey has noted that financial firms are continued victims of online hackers and internal fraud according to The Economist Intelligence Unit Report Card. Technology has made it easier for cyber criminals to steal from banks. Paper financial records, digital banking accounts and the Internet have created a vulnerable entry point for would-be fraud artists.

Incentive to Steal

Unlike the bank robber with a gun and getaway car, the online hacker can remain anonymous and use software programs to steal large sums of money in the blink of an eye. Many banks have high turnover rates, so if the hacker can get a friend to give him insider information, it makes the heist much more easy to perform.

Fraud Remains Serious Problem for Financial Firms

The Kroll Global Fraud Report noted that the average loss from fraud was 0.7% and there was at least one incident in 67% of the surveyed businesses. The positive note is that the losses were quite controlled. When a financial institution discovers fraud it can respond quickly to write off the losses and create a fire wall against future crimes.

Increased IT complexity was blamed for the high figures. Compared to previous figures, the level of fraud has increased 58%. In a vibrant 24/7/365 world, many financial firms have increased their exposure to the entire globe and must handle the problems that this entails.

Financial firms calculated that 30% of their fraud losses were due to external information theft, 25% was from internal fraud and 16% was due to a regulatory breach. The anonymous nature of the Internet can be a challenge when trying to track online fraud.

Fraud Varied by Region

One of the most encouraging signs was that fraud varied by region. In fact, fraud was down in the United States. Canada saw more theft of physical items. Mexico saw corruption as their biggest problem. Brazil and Saudi Arabia claimed that management conflicts of interest were the biggest issue.

As nations mature with their financial sectors, they face new challenges. The more developed countries have more online features available to their customers. Naturally, they must expect more fraud from Internet hackers. The good news is that there is a lot of software out there to help prevent Internet con artists from stealing your valuable information. The battle against fraud is back-and-forth and the enterprising firm will eventually catch most of the culprits.

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