Review, test and revise your fraud response plan
We know almost all businesses will have reviewed their business continuity plans, but has this included looking afresh at fraud risk and response? The fraud response plan should cover who - along with their stand-ins, in case of temporary absence - does what, such as preserving the data and evidence, contacting relevant third parties including banks, clients and regulators, and when (promptly but not in such haste as to create problems later).
Scrutinise risk indicators and investigate exceptions promptly and thoroughly
This may seem obvious, but we know from a number of fraud cases in the sector over the years, that all too often the red flags were there, such as patterns of trade amendments, cancellations, late payments, risk limit breaches, or unusually good or bad trading performance. Analyse these thoroughly, including by desk and counterparty, to identify exceptions and ensure they are investigated, with evidence retained. In the current environment, many people’s roles and associated access rights will have changed, which could give rise to conflicts that could be exploited.
Keep your teams talking
We know most commercial teams have established virtual huddles throughout the day. Ensure your risk and back office teams are plugged into what’s going on commercially, so they can be alert to what to expect, but also set aside time for those teams to discuss matters in their areas. Credit risk assessments, for example, are changing more frequently and it’s imperative all teams are alert to the implications of this. We are also seeing more senior personnel attend meetings, regularly or occasionally, that they wouldn’t usually attend, to both set the tone and ensure they are close to what’s going on, given the current disruption to markets and operations.
Review and revise incentives
Trading frauds are often linked to incentives and pressures to meet targets. Consider whether targets remain appropriate and whether communication on jobs and salaries could reduce fraud pressures.
Look after your people
It’s easy to feel overwhelmed by what is going on. So do look out for signs of stress and general health and wellbeing, as the points above are reliant on a diligent, calm and confident team.