A brief overview of different types of fraud affecting financial services firms in Lithuania and elsewhere - this presentation was delivered to ISM students in October, 2014
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ISM ppt October 2014_final
1. A Brief Overview of Financial Fraud
Affecting the Banking Industry in
Lithuania
28th of October, 2014
2. Disclaimer!
2
# These are my views
# They do not necessarily reflect the policies or
views of my current or former employers
# The main purpose is to share ideas and promote
discussion
4. Regional Manager of Security
Main responsibilities:
• Health and Safety
• Robbery prevention
• Drive offs
• Shop theft
• Staff fraud
• Violence against staff
• Investigation of
security incidents
• Liaison with the police
4
6. 6
Regional Director of Security
Main responsibilities:
# Counter fraud and counter corruption
# Physical security
# Fraud risk assessments
# Internal/external investigations
# Training of staff
# Liaison with law enforcement
# Liaison with other financial institutions
8. What do you know
about fraud in the
financial services
8
industry?
9. Common Elements of Fraud
# Dishonesty
# Fraudulent intentions
# Fraud by false representation
# Fraud by failing to disclose information
# Fraud by abuse of position
The Fraud Act, 2006
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35. Categories of Fraud Inherent in the Financial
35
Services Industry (cont’d)
1. Application Fraud
2. Facility Takeover Fraud
3. Misuse of Facility Fraud
4. Identity Fraud
5. False Insurance Claims
6. Asset Conversion
7. Staff Fraud
36. 36
Categories of Fraud Inherent in the Financial
Services Industry (cont’d)
Main categories of Financial
Crime:
1. Money Laundering and
Terrorist Financing
2. Fraud
3. Data Breaches
4. Bribery and Corruption
5. Sanctions and Freezes
37. 37
Reputational Risk
‘It takes 20 years to build a
reputation and five
minutes to ruin it’
Warren Buffet
45. 45
Main Issues/Challenges Faced by the
Financial Services Industry in Lithuania
# Fraud doesn’t occur here attitude
# Visible fraud vs. invisible fraud
# Lack of common fraud definitions
# Lack of fraud statistics
# Exchange of data on confirmed fraud
is prohibited by law
# Doesn’t share data on best practices
# Counter fraud staff lacks adequate
resources and training
47. Issues with Law Enforcement
# Often lack resources,
adequate investigative
skills and motivation
# Don’t understand
banking / banking
products
# Often engage in ‘blame
the victim’ behavior
# Jurisdictional limitations
47
50. Bank robberies in the Netherlands
Nederlandse Vereniging van Banke, 2014 50
51. 51
The Contemporary Crime Dilemma
‘If a network of Nigerian scammers
based in Amsterdam defrauds
French, Australian and American
credit-card holders, where does the
crime occur?’
‘Earning with the Fishes’, The Economist, 2014
52. General public lacks
awareness on fraud
risks inherent in
banking products
and how to
safeguard
themselves against
those risks
52
And finally…