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n e w h a v e n b i z . c o m | O c t o b e r 2 0 2 1 | n e w h a v e n B I Z 11 which saw usage increase during the pandemic, says Troy Damboise, executive vice president and chief operational risk officer for Liberty Bank. "Over the past 10 years, the accessibility of data has proliferated, and people are filling out their profiles with where they went to high school, their birthdays, their significant others' names," Damboise said. "Oentimes that's the type of information used for [financial account] security questions and cybercriminals look to harvest that information." Damboise says it's good practice for bank customers to review their monthly bank and credit card statements in a timely fashion and report any unauthorized purchases. While fraudulent credit card purchases are legally covered by the credit card company, the same protections do not automatically exist with bank accounts. Banks, Damboise says, must investigate and are likely to reimburse funds lost to fraud, but it's not as iron- clad as credit card protections. Among the top disruptive fraud-related events for banks in 2020, according to PwC's global fraud survey, were customer fraud (27%), cybercrime (15%) and financial statement fraud (14%). And it's not just external actors — like hackers — that are driving fraud rates up. Occupational fraud from internal employees is also playing a role. In fact, PwC numbers show that more than one in four survey respondents cited senior managers (26%) as their company's primary source of fraud. According to a global study by the Association of Certified Fraud Examiners (ACFE) there were more than 2,500 worldwide cases of internally-generated fraud at companies last year, causing total losses of more than $3.6 billion. In more than one-quarter of cases, the employee was experiencing financial difficulty. Steps to safeguard Rudewicz says it's important — particularly for small businesses hiring new employees — to conduct a job analysis of the role. "For a small mom-and-pop business, especially during COVID, if someone who has worked with you and you've trusted for years leaves," Rudewicz explains, "they might have earned access to certain parts of the business that a new employee in the role shouldn't have and that might expose a vulnerability for fraud for the business." Dan Sun, who oversees cybersecurity investigations for CLA, says it's important to use a multipronged approach to reducing cyber risks internally at financial institutions and businesses through robust IT security and employee training, and externally through a multistep identity authentication process, which is becoming more common with many banks, including texting codes to a customers' cell phone on record prior to allowing account access. "Hackers can remotely intercept a username and password," Sun said. "But it's harder to remotely intercept a EMCOR SERVICES NEW ENGLAND MECHANICAL We'll be there when you need us. With 50+ years of experience and more than 300 continuously trained, licensed, and certified facilities services technicians, we provide a wide range of building construction and facilities solutions across New England. COUNT ON NEMSI FOR: HVAC, Plumbing and Process Piping Design-Build Construction Electrical Services Energy Management Systems LEED Certification Programs Comprehensive Preventive Maintenance Programs 24/7/365 Emergency Response Call 860.871.1111 Toll Free 800.741.6367 Fax 866.481.3250 55 Gerber Road East, South Windsor, CT 06074 nemsi.com OFFICES IN Trumbull | New London | Palmer, MA | Albany, NY | Manchester, NH License #s: E1-0125666 • S1-302974 • P1-203519 • F1-10498 • SM1-192 • MC-1134 Frank Rudewicz oversees investigations for fraud, forensic accounting, asset tracing and other litigation for accounting firm CliftonLarsonAllen (CLA). customer's physical phone." Also gaining traction is biometric security measures like facial and voice recognition. And more businesses and banks are taking additional steps to protect themselves and their customers with 40% of PwC survey respondents saying they plan to increase their spend on fraud prevention in the next two years. And with good reason. Research has found that companies with a dedicated fraud-prevention program spent 42% less on fraud response and 17% less on remediation costs than companies with no program in place. Liberty Bank's Damboise said fraud and cybercrime are only going to get more complex. "We're always trying to stay one step ahead of the [identity thieves and cyber criminals] and they're trying to stay one step ahead of us," he said. n PHOTO | COURTESY

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