Insider fraud is where data or money is stolen from companies by internal staff or contractors who have access to internal systems and processes. Time and time again, reports by security experts find that malicious employees or other insiders are responsible for more than half and sometimes up to 90 percent of the cases where data or money has gone missing.
While most organisations have invested in robust security technologies to protect themselves from external attacks, many still struggle to address more challenging threats from within.
There has been a sharp increase in the value of frauds in New Zealand, with $100 million being defrauded in 2009 compared to $70 million in 2008 according to the KPMG Fraud Barometer Report.
Conducted on a six monthly basis, the KPMG Fraud Barometer monitors the level of reported frauds coming before the criminal courts here. The last report, released in June 2010 confirmed that for the fifth straight period cases coming before the courts have exceeded $20 million. Indeed, earlier this year a former investment banker admitted fraud charges in Auckland District Court involving nearly $18 million.
Reducing insider fraud in your organisation
So, how can CIOs help protect their organisations?
It is important to have a complete and accurate picture of employee activity across all enterprise applications, while also assembling a history of all user activity in one centralised location. In regards to retrieving evidence a solution is needed that lets you easily search, retrieve, and replay any part of a user’s complete activity history and safely storing it in a secure repository.
With an accurate picture of employee behaviour across multiple systems, it is made easier to distinguish between suspicious activity and legitimate work. Patterns, trends, and differences across multiple employees and departments need to be analysed, as well as across diverse applications.
Until now, most companies using fraud detection technology have been limited by siloed solutions, each working in different departments, so fraud prevention has been fragmented.
Factors to consider
Today, enterprise fraud management solutions make it easier to monitor fraudulent activity across organisations. Technology can be used to analyse the actions of all employees, every hour of the day, revealing illegitimate activity no matter where or when it happens. Rules can also be created to respond to suspicious activity patterns in real time and cross channel patterns can be identified.
When evaluating fraud control systems, consider how the system will be maintained without unduly disrupting production operations. For example, should the IT support group establish a test environment where upgrades and patches can be tested before applying them to production?
Fraud control systems are not databases, they require detailed knowledge to customise them for specific business requirements, so it is important CIOs evaluate the vendor’s ability to provide customisation services and training.
As insider fraud becomes increasingly sophisticated and industry and government regulations more demanding, CIOs need to be able to protect their sensitive data and identify actionable evidence of employee abuse when an internal fraud incident occurs.
Martin Mooney is New Zealand territory manager at Attachmate.
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