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A Bank’s Challenge to Protect Customers

A Bank’s Challenge to Protect Customers. Sharon Vance. Facts. Identity theft is the fastest growing crime in America. Nine million Americans have their identities stolen each year In 1998, identity theft became a federal crime. Penalties can include 15 years imprisonment

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A Bank’s Challenge to Protect Customers

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  1. A Bank’s Challenge to Protect Customers Sharon Vance

  2. Facts Identity theft is the fastest growing crime in America. Nine million Americans have their identities stolen each year In 1998, identity theft became a federal crime. Penalties can include 15 years imprisonment and a fine of $250,000.

  3. Examples • Dumpster Diving • Skimming • Phishing • Pharming • Fraud/forgery • Alteration of identification • Mail theft • Old fashioned stealing

  4. Why should research be conducted? Identity theft crime does not limit itself to age, occupation, person or business entity. Technological advances continue to accelerate the impact of the crime. Identity theft crimes are carried out on a local, national and international level.

  5. Research Question Have financial institutions identified a set of best practices to combat identity theft?

  6. Methodology • Compliance Officer Survey launched October, 2006 • Population included 270 members of Minnesota Bankers Association and Independent Community Bankers Association • Additional sampling among 200 Financial Institutions in Minnesota, Wisconsin, Iowa, North Dakota and South Dakota

  7. Methodology • Sample consisted of 65 respondents • Response rate 14% • Web-based survey tool utilized for member groups • Paper survey sent to randomly selected bank audience • 15 questions on survey

  8. Results Demographic Question: How many individuals are employed by your organization? # employees % of sample Fewer than 300 89% 301 – 1000 7% 1001 – 5000 2% 5001 + 2%

  9. Results Types of organizations represented in sample

  10. Results In 2005, what financial loss did your organization take as a direct result of identity theft crime?

  11. Results Question 2: Do you believe that Financial Institutions have a primary communication role in addressing the issue of identity theft with their client base? 92% agreed

  12. Results Question 7: Which external resources do you utilize to stay current on trends, risks and recommended best practices industry wide? • Federal Deposit Insurance Corporation (89%) • BankersOnline.com (86%) • Compliance Journals (66%) • American Bankers Association ( 65%) • Federal Trade Commission (31%)

  13. Results Question 6: Please state 3 to 5 “Best Practice Standards” your financial institution adheres to as it equips customers to combat identity theft crime.

  14. Results Examples of Best Practices: • Employee education • Brochures • Statement stuffers • Seminars • Customer ID program • Shred confidential information • Safeguard pin numbers • Post known scams on website

  15. Results Question 15 Does your financial institution take proactive steps to communicate with clients on the issue of identity theft? 89% - yes 11% - no

  16. Answer to Research Question “Have financial institutions identified a set of best practices to combat identity theft?” Yes

  17. Answer to Research Question 92% of respondents agreed that financial institutions have a primary communication role in addressing the issue of identity theft with their client base.

  18. In Addition 94% of surveyed Compliance Officers agree that the following regulations, policies and resources are “Best Practice Standards” in the financial services industry: • Patriot Act (2001) • Suspicious Activity Reporting • Privacy Statements • FinCen • Identity Theft Assistance Center

  19. Interpretation What does this mean? Compiled surveys support the belief that financial institutions are viewed as being the primary communicators on the issue of identity theft prevention. 89% of surveyed institutions take proactive measures to communicate about identity theft prevention to their client base.

  20. Recommendations What should be done with the results? • Minnesota Bankers Compliance Committee has requested final results to share with member Banks. • Final project findings will be used to formulate a strategic communications plan for Park Midway Bank and its affiliates.

  21. Future Research Recommended follow up studies: Survey other key personnel including: • Fraud/Forgery units with local Police Departments. • Credit Reporting Agencies. • Department of Motor Vehicles • Other pertinent industries impacted by identity theft crimes.

  22. Questions?

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