Bank Security

Mar 1, 1997 12:00 PM, By George Partington

The American Bankers Association (ABA) security roundtable discussion held in Atlanta highlighted effective fraud prevention and investigation strategies.

A high-profile bank robbery is not necessarily the greatest risk facing the banking industry. Bigger monetary losses come from the steady drip of money through the cracks. Banks lose $3 billion per year through financial crimes such as check fraud ($1 billion) and credit card fraud, according to William Perez, unit chief, financial institution fraud, Federal Bureau of Investigation Financial Crimes Unit, Washington.

Perez was part of the American Bankers Association (ABA) Security Roundtable Discussion January 27 at the Hyatt Regency in Atlanta, held as part of the 1997 ABA National Security, Audit and Risk Management Conference. Jim Incaprera, vice president and director of corporate security for First Commerce Corp., New Orleans, La., moderated the panel, which also included Thomas Begg Jr., vice president/director of corporate investigations and fraud prevention of First Chicago NBD Bank, Chicago; Charles Bock Jr., director of fraud prevention and investigation, Chase Manhattan Corp., New York; Cary Rosoff, assistant to special agent in charge of financial crimes division, United States Secret Service, Washington; and John Scott, postal inspector/program manager, U.S. Postal Inspection Service Office of Criminal Investigations, Washington.

The question on many bankers' minds: How do I get law enforcement to investigate my suspicious activity reports (SARs)?

The answer: to get law enforcement involved, get involved with law enforcement, said the panelists.

Develop relationships with various law enforcement agencies, Bock advised. Rosoff revealed that 95 percent of the cases his financial crimes division investigates start with referrals from local police, not from SARs. Scott noted, It is important to let prosecutors know that the banking industry is doing all it can to prevent fraud, so they don't think we're just giving them our dirty laundry.

It all comes down to communication with law enforcement, added Incaprera. Thieves Target Information

The rapid growth of on-line banking via the Internet has left banks vulnerable to cyber-attacks. The FBI is developing task forces to look into the safety of cyberspace for major business and government enterprises, said Perez. We are trying to address it before it becomes a crisis, he said. Banks are already losing money as a result of computer fraud schemes, including theft of credit card and checking information.

Scott, of the Postal Inspection Service Office of Criminal Investigations, said the same information is stolen from mail boxes and vehicles - they steal anything with account information on it. He said there is a need to harden the target with better security measures such as locks.

Locks often fail to prevent theft from within, and banks are exposing themselves to this risk with the employment of casual or part-time employees, temporaries and contract labor, all of whom are rarely screened for security risks, said Bock.

In this day and age, it behooves us more and more to know who we are doing business with, he said.

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