Prevention of internal fraud in banks: … using effective induction programs (2)

May 15, 2017
Source: Alberta Quarcoopome/
Prevention of internal fraud in banks: … using effective induction programs (2)

“It is only as we develop others that we permanently succeed”

Dear readers, last week I refreshed the topic of preventing internal fraud in banks through effective induction programs for new entrants. In addition, there is the need for the existing staff to be refreshed regularly, while coaching and mentorship programs are also instituted throughout the institution. It is never too late to learn new things.

Taking charge of risk from the Top- The Case of Fiaseman Rural Bank

Before I continue, I want to show appreciation to Mr. Evans Kinsgley Aidoo, the General Manager of Fiaseman Rural Bank in the Western Region, aided by the Human Resource manager, Mr Vincent Abutiate. I have never come across such commitment to the cause of training staff of the Bank. In most places, Management personnel are usually represented at the opening or closing of training programs. In this case, Mr. Aidoo was physically present, punctual and got involved throughout the week end program. Is it because it was a week end? Even if that was the case, I noted him actually take down some key points from the interactive sessions held. The Board Chairman Nana Edu Amanfo VI was also there the whole of the second day. Can you believe he also jotted down a few points? Unbelievable!. I doff my hat to the Board and Management of the Bank for their dedication to the cause of training.


Refreshing the old staff

The existing staff can always be refreshed by finding where they best fit in the institution and their strengths utilized to add value to the system, or as a last resort, an attractive package offered for their early exit. One of the sources of internal fraud is from staff who are disgruntled and want to get back at the system. Such people fall easy prey to external fraudsters and sometimes yield to temptation by colluding with them to defraud the bank. That is another subject altogether. For now I shall concentrate on banks prevent internal fraud through effective induction programmes for newly hired staff



Indoctrination of the bank’s culture            

This is a critical aspect of induction programs. One would ask why we even bring new staff together for induction.  One would say that the bank could have given them some reading material just to satisfy their curiosity and get it over with! Induction programs are so critical that that organizers need to make them leave indelible marks in the memory of the inductees. This is the ideal opportunity to promote the organization’s core values of honesty and integrity, and demonstrate the zero-tolerance policy. In addition the reference to examples of fallen employees who succumbed to temptation and suffered the consequences for inadequate job performance can also be a preventive control, especially for employee fraudulent activity.

Putting the “Fear of God” in the inductees

The need for risk awareness creation is very critical in induction programs. Having organized several induction programs for beginners, one of my memorable experiences was during the fraud awareness sessions. These sessions were usually handled by Managers of the Risk and Audit Departments as well as the Security Coordinator (who in most cases are ex-CID officials). The fact that the names, the types of fraudulent activities perpetuated and even sometimes pictures of “fallen employees or heros” of the banks are sometimes exposed to the inductees, not forgetting the consequences they suffered, usually leave a clear message that staff members will be immediately terminated, lose their valuable source of income and benefits, and be taken to court (if possible) if they perpetrate fraud. The use of pictures of the fallen employees shows how anyone on the job can be very vulnerable and succumb to temptation. It also proves the fact that fraud is no respecter of age, gender, status, grade or position. When such sessions includes the bank’s Head of Security/Security Coordinator, the inductees are exposed to the hard truths and even sometimes the mode of operations used by the internal fraudsters. There have been times that I had to ask the inductees: “Have you regretted taking the offer to work in the bank?”  Not surprisingly, a few were really shaken but eventually they quickly imbibe the slogan that not all that glitters is gold. They were taught to trust each other but still verify and ensure work done is according to the rules and regulations in the bank. In fact, such sessions on frauds reiterates the fact that the bank does not tolerate fraud of any type. Although the “fear of God” is put in the inductees, it is still done in a soft but firm way in order not to “chicken” them out of the job.


Best Practices in conducting induction programmes 

According to Wikipeadia… “An induction programme is part of an organisations’ knowledge management process and is intended to enable the new starter to become a useful, integrated member of the team, rather than being "thrown in at the deep end" without understanding how to do their job, or how their role fits in with the rest of the company.”

The induction programme should be planned in advance. A timetable should be prepared, detailing the induction activities for a set period of time (ideally at least a week or two) for the new employee, including a named member of staff who will be responsible for each activity. This plan should be circulated to everyone involved in the induction process.


The Preparation

Ensure there is an induction pack containing only useful or interesting information, a brief of the bank’s history into a one-pager, with head office and branch locations, and if possible include site maps with relevant buildings/rooms/routes already highlighted for them. A copy of the time table should be included in the pack. The appropriate stationery and name tags should be prepared before the arrival of the beginners. What a pleasure it is for inductees to arrive to see their names tags already in place! It shows the bank is waiting for them in anticipation and looking forward to welcome them into the family. I used to work in a bank which had a branded name for its staff members. I will always remember the first day when I was being shown around and introduced to the staff within the block. The first person who made me feel welcome was a lady who shook my hands and said “welcome to the ******** family” I still remember her up this day. Creation of loyalty starts from day one. An official from the Training department should call the new hires and give them clear directions to the training venue and time. This is to prevent inductees arriving late, sweaty and feeling embarrassed. The seating and workspace for the inductees should be productive. Gone are the days when any wooden chair looked appropriate. Comfortable seating arrangements facilitates absorption and interaction.

Involvement of Senior Managers and Directors in the induction

The welcome ceremony should be warm. This might be through welcome speeches. If the CEO is not available, why not show a pre-recorded video welcome address by the Chief Executive Officer? It will be creative and become a pleasant surprise. At least a few management personnel should grace the occasion during the opening ceremony. We must never underrate the importance of the presence of these personalities. There are other sessions during the induction when others should be present. These are the Q&A sessions or joining the group for lunch. In addition, there should be a few representatives of management at the closing ceremony. This is another opportunity to send the message that the new entrants are valuable to the bank as they are ushered into the real face of banking to start work.

Swearing the Oath of Secrecy

One of the cardinal rules in banker customer relationship is the swearing of the bank’s oath of secrecy. Inductees are obviously coming from various workplaces, institutions and sectors. This is the time that the bank needs to strike it hot! Usually a member of the legal department conducts the swearing of the oath of secrecy followed by the signing of the oath by the inductees. This is the time when banks can use some time to give cases of staff who flouted this principle. Why am I saying this? The reason is this: we should not wait for cashiers to be shouting customer’s names and balances in the banking hall in such a manner that third parties can hear them! These are inadvertent disclosures by staff which can land the bank into legal suits! Beginners should not always learn by making mistakes and being corrected. A stich in time saves nine. Next time inductees are swearing the oath, they should feel that it is not a laughing matter. This is where they sit up and know that the banking profession involves a contract between the customers and the bank. Maintaining the duty of confidentiality of customers’ affairs is a sure way to prevent fraud.


To be continued

Do you want better service from your branch staff?  Please buy them copies of my books: “The 21st Century Bank Teller,” and “My Front Desk Experience – A Young Banker’s Story”. Check out from the offices of the Chartered Institute of Bankers, the National Banking College in Accra. Call the hotline-0244333051 for special packages.



Alberta Quarcoopome is a Fellow of the Chartered Institute of Bankers, and CEO of ALKAN Business Consult Ltd. She uses her experience and practical case studies, training young bankers in operational risk management, sales, customer service, banking operations and fraud. 


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