Engaging Your Staff In Bank Security

Abstract (Summary)

With the threat of physical and electronic attacks ever present, banks need to be on full alert. To make things more difficult, bankers not only have to focus on external attacks, but also on internal ones. Keeping communications open between the Sherlock Holmeses in the teller's booth, the sleuths in the back office, and senior management is the single most important thing a bank can do to ensure its security, according to Tom Murray, Franklin Savings Bank. While it is essential that all staff possess the same security training, front-line personnel represent the first line of defense, according to Kay Moon, West Georgia National Bank of Carrollton. Instances of fraud can affect any community bank, no matter the location, and employees and customers need to be on their toes, Moon said. In an electronic era, banks can't stop at physical security. As banks employ increasingly sophisticated technologies to serve customers, new electronic security threats are emerging.

At Alaska Pacific Bank in Juneau, "detective" and "master sleuth" aren't listed on the job descriptions of front-line personnel. But they might as well be.

"You never know who might answer the phone and deal with a bomb threat, or who might be in the lobby when a robbery occurs. Everyone needs to know what to do in case of a crisis," said Lisa Corrigan, executive vice president and chief operating officer of the $162 million-asset ACB member bank.

Being prepared and involving every employee in the banks security efforts is not unique to Alaska Pacific, according to Corrigan. "It doesn't matter where you're located or what size you are, you can still suffer from security threats. If you're not proactive with your security policies and procedures, you're a sitting duck," she said.

With the threat of physical and electronic attacks ever present, banks need to be on full alert. To make things more difficult, bankers not only have to focus on external attacks, but also on internal ones.

Here are some examples of how banks are using staff to face the challenge.

Communications and Training

Keeping communications open between the Sherlock Holmeses in the teller s booth, the sleuths in the back office, and senior management is the single most important thing a bank can do to ensure its security, according to Tom Murray, executive vice president of Franklin Savings Bank in Salem, N.J. "With the number of threats out there, everyone has to be constantly on guard and ready to notify the rest of the bank of any suspicions," Murray added.

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To help keep employees alert about security issues, "we rigorously train our staff in their opening and closing procedures, and make certain that they are constantly aware of who's in their branch, and who's hanging around outside," Murray said. "This is one of the best ways a bank can prevent robbery," he added. Franklin Savings is an ACB member with $256 million in assets.

Alaska Pacific also makes training a priority. All staff-from the teller line to senior management-are required to participate in physical security training each quarter. The board also plays a crucial role in devising security policy, Corrigan said. The audit committee basically oversees the security policies of the bank, she added.

Communications and training are especially important priorities at Alaska Pacific because of the unique landscape it operates in. "When you leave Juneau to go to our other branches, the only way to reach them is by plane or boat," Corrigan said.

While it is essential that all staff possess the same security training, front-line personnel represent the first line of defense, according to Kay Moon, vice president and security officer at West Georgia National Bank of Carrollton, a $377 million-asset institution in Carrollton, Ga. "I call my tellers my front-line warriors, and they really need to be trained to identify fraud," Moon said.

Instances of fraud can affect any community bank, no matter the location, and employees and customers need to be on their toes, Moon said. "We recently had a customer who had his ATM PIN number used in the United Kingdom. A lot of fake Web sites lure customers into divulging PIN numbers and other personal information, leading to the creation of debit and credit card copies. We actually link customers to a Georgia ID theft prevention site, www.stopidentifytheft.org, and we're always sending employees alerts on this issue," Moon said.

West Georgia National Bank also uses signature verification systems to help tellers spot cases of fraud more easily. "Criminals can make use of VersaCheck, which you can buy anywhere, to create fake checks. To help combat this, we've instituted the MyID program. For a fee, customers can get their picture and signature on the front of their debit card. We also use a signature verification system, EasyID, on the teller line. In addition to signatures, tellers can pull up drivers license pictures," Moon said.

The bank sweetens the deal by offering cash rewards to tellers who stop fraudulent activities, Moon added.

The next step in fighting fraud? "I see biometric security technology as being the next big thing. It may not be ready just yet, but it is coming soon, and it will sweep the field," Moon predicted.

Use What You've Got

Sometimes stopping fraud can be as easy as turning on a function of your system that you weren't using. At Androscoggin Bank in Lewiston, Maine, most fraud comes from new account openings, according to Joseph Liguouri, a senior vice president at the $472 million-asset ACB member bank. "Customers come in, open up an account with $10, and then deposit a bad check. The next day, they walk in and withdraw the money," he explained.

To combat this, the bank put an override into the system, so if someone tries to withdraw money within the first 30 days of opening that account, "a supervisor has to come over to check things out," Liguouri said. The override capability was already in the bank's system, so it cost nothing to implement.

Inside or Outside?

Complicating the matter is the fact that not all security threats are