Anti-fraud initiatives can end up making the banking environment more risky rather than less, claims David Porter, head of security and risk for the consultancy Detica.
The danger is that having too many compliance officers and inspectors leads to complacency, with staff looking less closely for fraud because they believe someone else is doing it.
Mr Porter, who contributed to the new book on money laundering The Washing Machine: How Money Laundering and Terrorist Financing Soils Us by Nick Kochan, compared the banking situation to driving with a seat belt on. “Most of us drive more carefully if we are not wearing a seat belt,” he said.
The problem is that banks feel haunted by regulators at present. Their response is to write out a big cheque as a defence rather than making an effort to understand the best way to mount a defence against fraud and money laundering.
