SOURCE: Actimize


November 23, 2009 09:00 ET

Biennial Employee Fraud Research by Actimize, a NICE Company, Finds Increasing Magnitude of Employee Fraud

NEW YORK, NY--(Marketwire - November 23, 2009) -

--  Full-time Employees Riskiest
--  Employee Fraud Problem Increasing Due to Slowing Economy
--  Seventy-Two Percent of Respondents Concerned with Employee Sabotage
--  Financial Distress Cited  as Top Contributor to Employee Fraud
--  84 percent say industry is likely to experience a rogue trading loss
    of over  $100 million in the next year

Actimize, a NICE Systems company and the largest and broadest financial crime, compliance and risk management solutions provider to the financial services industry, today announced the results of its biennial research measuring employee fraud within financial institutions. Eighty-two percent of those surveyed, approximately a quarter more than in 2007, see the threat of employee fraud growing and 78 percent see the employee fraud problem increasing due to the slower economy.

Surprisingly, the study uncovered that more than 69 percent of respondents view full-time employees as the highest risk segment, seven to 14 times more risky than part-time, offshore, outsource or temporary employees. Actimize believes that the reason for this result is that non full-time employees are often monitored more closely and have access to fewer critical systems and less sensitive information. Conversely, employees with complete access to firm systems and assets are almost always full-time.

Increased Threat

Financial institutions have become increasingly alarmed with employee sabotage, with 72 percent of respondents stating that they are moderately to extremely concerned that laid-off or disgruntled employees will plant malicious software scripts or destroy company property. Along with the threat of employee sabotage, 62 percent of respondents indicated that they see rogue trading activity increasing due to the slowing economy and 84 percent say the industry is likely to experience a rogue trading loss of more than $100 million in the next 12 months.

Financial Institutions Improve Readiness

The study found that more than three-quarters of respondents said the nature of employee fraud is becoming more sophisticated, yet less than 30 percent use the latest generation of tools to protect against employee fraud. This is actually a significant improvement from 2007, where only eight percent used the latest generation of technologies to combat employee fraud. Fifty-eight percent of respondents rate the financial industry's ability to detect employee fraud as poor or somewhat acceptable, which is also a noticeable improvement from 2007.

"As the research shows, regardless of the direction the economy takes in the near future, financial institutions are expected to be increasingly concerned about the threat of criminal employee behavior," said Paul Henninger, head of the financial crimes product group at Actimize. "Luckily there is evidence that the industry is improving its ability to investigate and catch employee fraud. Even in lean times, financial firms must continue to invest in technology to protect firm and customer assets."

Additional findings from the research include:

--  Sixty-seven percent of those surveyed think that a half or less of
    employee fraud cases are actually caught
--  When ranking top ways firms uncover employee fraud, 34 percent
    admitted "accidentally"
--  Well over half of the respondents listed budget as their company's
    biggest internal challenge as it relates to managing the employee fraud

These findings are based on a September Actimize study that was managed by Infosurv, an independent research company. This project included over 70 detailed responses from financial institutions around the world, nearly half of which were from retail banks, and over half from organizations with asset sizes over $30 billion USD. Over 50 percent of the individuals that responded specialized in fraud prevention/loss management and IT/Information Security, and the remainder were spread across internal audit, corporate investigations, corporate security, compliance and risk management roles.

To access the full report, go to

About Actimize

Actimize, a NICE Systems company is the world's largest and broadest financial crime, risk and compliance solutions provider. Actimize empowers its clients to prevent financial crime, mitigate risk, reduce operational costs, minimize losses and improve compliance. Actimize provides real-time and cross-channel fraud prevention, anti-money laundering, enterprise investigations, risk management and trading surveillance solutions; built upon the Actimize Core Platform which has been enhanced by the company's acquisitions of Syfact and Fortent (Searchspace) analytics and technology. With offices across North America, Europe, Asia and the Middle East, Actimize serves the majority of the world's largest financial institutions including all of the top ten global banks.

About NICE Systems

NICE Systems is the leading provider of Insight from Interactions™ solutions and value-added services, powered by the convergence of advanced analytics of unstructured multimedia content and transactional data -- from telephony, web, email, radio, video, and other data sources. NICE's solutions address the needs of the enterprise and security markets, enabling organizations to operate in an insightful and proactive manner, and take immediate action to improve business and operational performance and ensure safety and security. NICE has over 24,000 customers in more than 150 countries, including over 85 of the Fortune 100 companies. More information is available at

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on the current expectations of the management of NICE Systems Ltd. (the Company) only, and are subject to a number of risk factors and uncertainties, including but not limited to changes in technology and market requirements, decline in demand for the Company's products, inability to timely develop and introduce new technologies, products and applications, difficulties or delays in absorbing and integrating acquired operations, products, technologies and personnel, loss of market share, pressure on pricing resulting from competition, and inability to maintain certain marketing and distribution arrangements, which could cause the actual results or performance of the Company to differ materially from those described therein. We undertake no obligation to update these forward-looking statements. For a more detailed description of the risk factors and uncertainties affecting the company, refer to the Company's reports filed from time to time with the Securities and Exchange Commission.

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