Fraud prevention: a question of ethics

How compatible are fraud prevention, compliance and human behaviour?

This paper is abridged from a presentation originally delivered to the ACFE/IIA Luxembourg chapter meeting in September 2020. It also forms part of a series of Sionic Fraud Talks running during 2020.

What really drives different fraudsters – and how can firms outpace the sophistication of “well-organised crime”? This paper and the accompanying Sionic Fraud Talks webinar series explore the connection between ethics and fraud prevention. We discuss the links between how experts, customers and fraudsters behave and look at the psychology of criminal fraudsters, in order to suggest how best we can defend ourselves, our firms and our clients against attack.

A definition of terms

 Ethics is a huge, complex subject, although one that can be relatively simply defined as: “the moral principles that govern a person’s behaviour, or the conducting of an activity; or the branch of knowledge that deals with moral principles.”

When it comes to financial crime and fraud prevention, there is an obvious relationship between ethics and fraud. Obtaining money by deception is at fundamentally unethical – and therefore, by fighting fraud we are, by default, ethical.

While it may be possible to argue that ‘moral principles’ might include ‘immoral principles (just as ‘values’ may not necessarily be ‘good’ or ‘positive’) let us assume that morality is benign and that, being fraud prevention advocates, we occupy a righteous moral high ground.   But this is clearly simplistic.

As fraud professionals, we need to evaluate and understand our own motives and assumptions, the culture of our organisation. the bias of our systems and the behaviour of our customers, in order to fight fraud effectively.  On the way, we may find ethical ambivalence abounds…

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Fraud prevention: a question of ethics

About the author

With over 20 years’ experience, I am a fraud specialist equipped with the skills to protect financial institutions, banks and their customers from attack