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Rod SmithThis month, I would like to discuss preventing fraud versus detecting it.  Organizations often have an overreliance on detection versus prevention.  While the first method is good, it’s often very time consuming, costly, and sometimes, it’s a little too late.  Please don’t misunderstand, I believe you must have a good balance of both.

Since the New Year is around the corner, let me remind you that this is the perfect time to meet with your team and assess business activities and areas where you feel additional training could enhance controls. One of the simplest and least costly controls is implementing a strong training program for employees. The more your staff is provided with resources, guidance, and proper training, the more your team has a fluid and reliable working knowledge of procedures and specific requirements that enhance controls. Building this awareness builds an expectation, and the expectation creates a culture in the team. When folks know what to expect, they can more easily recognize inconsistencies and errors.

Back when I worked in the finance and banking industry, I was asked to assess business activities associated with our tellers. There were several areas that I addressed, but one seemingly small point revolved around customer and environmental awareness. The organization’s training program at the time required tellers to focus solely on the customer they were working with at their window. When there was a line, the tellers became so busy, they hardly ever looked up from their tills, simply calling on whomever was next in line. I see this same behavior at most grocery stores: the cashiers have their back turned to folks walking in, and often greet people over their shoulder as they walk in. Why is this important? During my training sessions with the tellers, I found out that they couldn’t remember or recognize their customers, nor could they detect when something seemed out of place – like a customer walking in with a hat, sunglasses and a baggy coat. Would this seem odd or abnormal? If this occurred on a dark and rainy summer day, it might, but what if it was on a normal day? This small deficit pointed to a much larger concern: staff who were not paying attention were more susceptible to theft and outside threats. My training solution was to instill a simple enhancement that required them to look up and observe their surroundings and greet customers by making eye contact with them. I can assure you, by the tellers simply looking up and making eye contact when acknowledging their customers, it showed that they were alert, which was a very easy control technique that strengthened their security.

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