Fraud Risk Management

Duration:
2 days
Location:
Prague, NH Hotel Prague
    In this concentrated 2-day seminar we will:

  • Discuss and evaluate the particular fraud risks faced by financial institutions which continue to be a major target sector for fraudsters, launderers and terrorists
  • Cover the methodologies used by those who are planning to harm your organization and society at large
  • Concentrate on the details to look for and how to prepare a risk-based fraud policy, prevention, detection and monitoring program and a response plan
  • Look at the issues involved, and ensure that staff know what they should and should not do both to understand and to deal with cases of fraud
Without doubt, Financial Crime – represented by Money Laundering, Terrorist Financing and Fraud – is a hot topic in 2012. It is high on many agendas, principally those of Governments, Central Banks and the whole of the international banking industry covering Retail Banking, Corporate Banking, Private Banking and Investment Banking.

Until recently, Financial Crime was dismissed as a "victimless crime" on the basis that it doesn't really matter if a few banks lose money through Money Laundering or Fraud. But the dreadful impact of the September 11th 2001 and other attacks throughout the world since then, coupled with the recent international economic downturn has raised its profile to unprecedented levels.

Fraud, as a key part of Financial Crime, is an ever-present risk and one that is notoriously hard to control. It was a major factor in the run up to the credit crisis, when the asset bubbles that started to burst in 2007/8 were created. And still, 5 years later, hardly a day passes without a new headline from somewhere in the world of criminal activity related to fraud. Most worrying, all indications suggest that locally, nationally and internationally, fraud will continue to increase.

Module 1: Fraud – Appetite, Risk and Culture

  • What is “fraud”?
  • How fraud is legally defined
  • What is “fraud risk appetite”?
  • What are the costs of fraud & associated financial crime?
  • Communication & Coordination
  • Whistle-blowing policy
  • Typically, who commits fraud?
  • Is fraud really a victimless crime?
  • What are the key areas where fraud is on the rise?
  • How to (try to) identify a fraudster

Module 2: Fraud Risk Monitoring

  • The creation and implementation of a fraud risk policies; the development of processes and procedures to assess and manage fraud risk
  • The key pro-active and re-active controls a firm needs to have in place to detect and prevent fraud
  • How should an organisation assess its susceptibility to fraud risk?
  • What are the key pressure points and fraud risks in an organisation and how should they be continuously assessed?
  • What is a fraud risk register?

Module 3: The Management of Fraud and StaffTraining on Fraud

  • Who should be part of the fraud management team?
  • What are the key roles?
  • How should organisations increase fraud awareness among its staff?
  • Who should be trained and what type of training works best?
  • What are the key elements of such a training programme?

Module 4: Fraud detection

  • What are red flags which might indicate that fraud is being (or is about to be) perpetrated?
  • What information will an organisation need to evaluate the risk?
  • The use of data-mining in theprocess of detecting fraud

Module 5: Dealing with Suspicion

  • What is meant by “Suspicion”?
  • What should be the immediate response to a suspicion?
  • Who needs to be told?
  • What should the next stage be?

Day Two

Module 6: The Investigation

  • Who should undertake the investigation?
  • Who should notundertake the investigation?
  • What are the key skills needed to undertake professional and efficient investigations?
  • What are the key stages in an investigation?
  • How to deal with employees under investigation
  • How to deal with the rest of the team
  • What records should be maintained?
  • When interviewing suspects, it’s not what you know, it’s……?

Module 7: The Role of Internal Audit

  • Independent and objective review of the risk model, including fraud risks
  • Mapping the Internal Audit Universe against the risk model
  • Audit planning based on asserted risk mitigation
  • Audit testing
  • Recommendations for improvements
  • Audit reporting cross-referenced to the risk model
  • Red flag appreciation

Module 8: Fraud Scenarios in Banking

  • Client take-on
    • Account opening
    • Personal & Business Customer Due Diligence
    • KYC/ ID&V
  • Current & Deposit Account frauds
    • Cheques & Payment Orders
    • Alteration, Forgery, Counterfeit, Conversion, Fraudulent authorities
    • Misuse of Non-Face to Face channels – telephone, fax, internet
    • Impersonation
  • Lending and Borrowing Fraud
    • Commercial loan fraud
    • Fictitious parties/collateral / assets
    • Abuse of internal lending authority levels
    • Misuse of position
  • IT Frauds
    • Electronic payments/ Wire transfers
    • Denial of service attacks
    • Hackers, Viruses, Worms & Trojans
    • Phishing & ID fraud, theft

Module 9: Internal Frauds

  • Frightening trends!
  • Motive, opportunity, rationalisation
  • Physical security
  • Possible defences/ Internal controls

Module 10: Links to other Financial Crimes

  • Money Laundering
  • Terrorist Financing
  • Identity Theft and “Phishing”
  • Bribery and Corruption
  • Developing and implementing a risk-based approach

Evaluation and Termination of the Course

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