by: Banker's Hotline
Many financial institutions struggle with this question. We agree with the Deloitte Center for Corporate Governance, and the Association of Certified Fraud Examiners recommendations that companies establish a formal Fraud Response Management program. Deloitte points out that “The overarching goal of a fraud response program is to protect the organization from the potential economic, reputational and legal risks associated with a fraud allegation.”
The fraud response program, which should be tailored to fit your bank’s size and unique culture should consider:
- The assignment of responsibility and accountability for handling allegations of fraud and misconduct
- The methods and procedures by which allegations are investigated
- Documentation and evidentiary procedures
- Decision making authority
- Reporting of investigation results within the bank, and
- Regulatory reporting responsibilities
Planning ahead by developing and implementing an effective fraud response management program – as part of an overall anti-fraud program – is essential and will help your bank avoid significant risks.
This Q&A originally appeared in Bankers' Hotline. For more information, sample issues, and to subscribe, click here or email bh@bankersonline.com