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Preventing fraud is a classic case of it is far easier to say it than to do it. Fraud schemes are frequently complex and sophisticated, not easily discernable to even experienced security personnel. Even the simple task of verifying signatures will frequently bow to the need to provide prompt customer service. However prevention is far less expensive than the losses that will be suffered by the occurrence of a crime and the subsequent investigation and recovery efforts. There are several steps that financial institutions can (and in some cases must) take to reduce fraud.

Implement a comprehensive three point Customer Identification Plan (CIP) as directed by section 326 of the USA Patriot Act. Designed in the wake of September 11th, the USA Patriot Act serves to identify terrorists and prevent their actions. Section 326 speaks to preventing money laundering through the thorough identification of persons opening new accounts. Effective in October of 2002, the requirements of a CIP also reduces the likelihood of an identity thief opening a new account and makes kiting schemes more difficult to establish and run.
Overhaul and upgrade each CCTV surveillance system. Nearly all financial institutions have installed surveillance systems to aid in their compliance with the 1968 Bank Protection Act. Most financial institutions are still using time-lapse VCRs with obsolete multiplexers. Vast technology improvements such as those exhibited by FocusMicro’s line of Digital Video Servers yield improvements in image quality and system capabilities that are far beyond video tape technology.
Integrate the institution’s transaction system with the CCTV surveillance system. Digital Video systems can record all of the different transaction types that your organization performs along with the digitized video images, allowing managers and security officers to quickly and easily locate crisp, clear video history of an individual transaction. This is an invaluable tool for spotting suspected criminals.
Implement an inkless fingerprint program as recommended by the FBI. Specifically targeting non-institution customers, this program seeks to reduce the number of fraudulent checks and counterfeit instruments that are negotiated.
Develop a comprehensive employee training program that is cost effective enough to support employee turnover, but detailed enough to put only well trained personnel in contact with the public.