Bank data flows are assets or instructions that ultimately lead to the movement of assets. The speed with which assets can be transferred through electronic payments and message switching systems complicates internal control. Successful fraud does not just lead to direct financial loss for the institution; when the media finds out about them, they also undermine the credibility of the institution and the banking system as a whole. Given the many possibilities of access to computer documents, there are many risks of fraud.
Our past before digitalization: – Either 3.5 million years ago, our ancestors left traces. For most of the history of humanity, about 40,000 generations, we live as nomads, in small tribes of hunter-gatherers. We make tools, tame fire and invent language. – 30,000 years ago, we draw on the walls of caves. That’s when we invent astronomy. Our survival depends on the reading of the stars. It is necessary to be able to predict the arrival of the winter and the migration of the herds. – Then 10,000 years ago a revolution shakes up our way of life. Our ancestors learn to shape their environment, they domesticate animals, cultivate the land and settle. Nothing is the same! For the first time in our history, we have too many possessions to carry everything with us. We need a way to count. – About 6,000 years ago we invent writing. Very quickly, we note much more than quantities of grains. Writing allows us to record our thoughts and spread them in space and time. Through inscriptions on clay tablets, we can claim immortality. The world is upset.
Here are a few examples: – the introduction of unauthorized transactions in a computer system; – Unauthorized modification of programs during routine development and maintenance operations, which can lead to automatic fraudulent transactions, ignoring control tests for specific accounts or eliminating the risk of fraud. registration of specific transactions; – the use of special programs to modify computer documents without permission by bypassing the usual control devices and audit trails integrated into computer systems; – physical extraction of files from the computer, which will be changed elsewhere by inserting fraudulent transactions or balances before returning to the place for processing; – introduction or interception in order to change transactions during transmission over telecommunication networks.
Data storage. New forms of payment are currently being introduced, which allow third parties to initiate payments using electronic equipment. The chances of some of these types of fraud occurring due to unauthorized access to telecommunication systems are increasing. Most banking systems include controls and provide information to facilitate the prevention or detection of this type of fraud. However, this information also risks being processed by people with access to terminals or computer files.
In order to create effective internal control systems, it is important to identify all vulnerabilities in each system. Sensitive programs and recordings must be specially protected from unauthorized changes. Care must also be taken to ensure adequate training for personnel working in sensitive areas and to allocate tasks correctly. Interruption of business due to hardware or software failure Computer systems consist of several hardware and software components, and failure of one of them is enough to block the entire system.
Personal information. These elements are often concentrated in one or a limited number of places, which increases their vulnerability. The classic remedy against system failure was a return to manual processes that were replaced by a computer system. In most cases, this approach is more unrealistic, and only a few banks can work without computer systems. Processing and providing information using advanced technologies has increased the user’s dependence on the availability and reliability of automated systems.
The constant availability of the bank’s information system is an integral part of effective decision making. When IT systems fail, the resulting negative consequences for real-time banking services for customers immediately and quickly worsen. Delays accumulate and, if the failure lasts several hours, their elimination can last several days.These consequences are especially destructive in the case of electronic and payment systems, especially those that guarantee settlement on the same day when the recipients depend on receiving funds to fulfill their obligations. The cost of a serious system failure can significantly exceed the cost of replacing damaged hardware, data, or software. Having effective contingency plans can enable users to reduce the likelihood of such operational problems.