Insidious: How trusted employees steal millions and why it’s so hard for banks to stop them

Authors: Shirley Inscoe and BC Krishna
Pages: 156
Publisher: Memento Press
ISBN: 0982527209

Introduction

Why do employees steal? As you will see in the book, it is a combination of motivation, opportunity and attitude. But it is all underlined by the issue of trust, which is inherent both in our nature and in the operation of banks and financial institutions. With more than three decades of fraud experience between them, the authors offer a peek behind the curtains of the growing problem of employee fraud.

About the authors

Shirley Inscoe is the Director of Financial Services Solutions at Memento. She held a variety of senior positions in payments strategy, enterprise fraud, compliance and operations during her 29 year banking career at Wachovia.

BC Krishna is the founder and CEO of Memento, founded in 2003 to help financial services enterprises in fighting internal fraud.

Inside the book

Opportunity is at the origin of all fraud, but it is a strong enough motivation the thing that pushes the fraudster towards the realization. Fraudsters can be found at every level of the organization – from the lowly bank teller to the branch manager, or even the assistant vice president. Indeed, higher-level employees have more power, greater access and are less likely to be controlled, and have thus even more opportunities for committing fraud.

It is the usually a person nobody would ever suspect: the friendly, reliable, smiling, “always ready to help out and never takes a day off” colleague. The authors provide reasons why this kind of fraud takes long to detect, and ways how to estimate the total loss (financial and to the reputation of the enterprise).

This book also offers sound advice about insider fraud prevention, and a very informative chapter on fraud trends and the reasons behind the proliferation of this kind of fraudulent scheme.

How to detect and investigate, which approach to use for discouraging and which for bringing to light such schemes – it’s all here. At the end of the book there is an interview with a convicted fraudster that provides fascinating insight into the mind of such people. I might also mention that the entire book is peppered with real-life cases.

Final thoughts

This is a book aimed at everyone involved in banking and financial services in general. This does not mean that insider fraud happens only in these enterprises – only that it’s more easier to perpetrate it because it involves a great number of financial transactions. The book deals mainly with examples within those type of enterprises.

I found the book a little repetitive. The first part could have easily had half the amount of pages, and still get the message through. Anyhow, it is more a reminder that anything else. We all know these things, but we are not used to mistrusting our colleagues. This book can help us take a step back and (maybe) see things with fresh eyes.

The second part is rife with advice and methods for identifying and examining the particular cases – definitely more informative and to the point.