Survey Finds Financial Firms More Worried about Employee Fraud

November 23, 2009 ( - Actimize, a provider of financial crime, compliance, and risk management solutions to the financial services industry, says its biennial research finds 82% of those surveyed, approximately a quarter more than in 2007, see the threat of employee fraud growing, and 78% see the employee fraud problem increasing due to the slower economy.

The study indicated that more than 69% of respondents view full-time employees as the highest risk segment, seven to 14 times more risky than part-time, offshore, outsource, or temporary employees, according to a press release. Actimize said it believes the reason for this result is that non full-time employees are often monitored more closely and have access to fewer critical systems and less sensitive information.

Seventy-two percent of respondents stated that they are moderately to extremely concerned that laid-off or disgruntled employees will plant malicious software scripts or destroy company property. In addition, 62% of respondents indicated they see rogue trading activity increasing due to the slowing economy, and 84% said the industry is likely to experience a rogue trading loss of more than $100 million in the next 12 months.

More than three-quarters of respondents said the nature of employee fraud is becoming more sophisticated.

Less than 30% use the latest generation of tools to protect against employee fraud, but the press release said this is actually a significant improvement from 2007, where only 8% of respondents used the latest generation of technologies to combat employee fraud. Fifty-eight percent of respondents rate the financial industry’s ability to detect employee fraud as poor or somewhat acceptable – also a noticeable improvement from 2007, according to the announcement.

Sixty-seven percent of those surveyed think that one half or less of employee fraud cases are actually caught. When ranking top ways firms uncover employee fraud, 34% admitted “accidentally.”

Over half of respondents listed budget as their company’s biggest internal challenge in managing the employee fraud threat.

The survey included over 70 detailed responses from financial institutions around the world, nearly half of which were from retail banks, and over half from organizations with asset sizes over $30 billion.

The full survey report can be accessed at