JIS News

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  • Chief Technical Director in the Financial Investigation Division (FID), Ministry of Finance and Planning, Justin Felice, says financial institutions need to put measures and strategies in place that will safeguard their operations against the incidence of fraud.
  • These include conducting client risk assessments, and establishing risk registers to document potential fraud threats, and strategies to counter them.
  • Mr. Felice argued that if institutions are at the stage where they are attempting to detect the occurrence of fraud activities in their operations, “that means you have a problem.”

Chief Technical Director in the Financial Investigation Division (FID), Ministry of Finance and Planning, Justin Felice, says financial institutions need to put measures and strategies in place that will safeguard their operations against the incidence of fraud.

These include conducting client risk assessments, and establishing risk registers to document potential fraud threats, and strategies to counter them.

Mr. Felice was addressing an anti-fraud seminar hosted by the Jamaica Institute of Financial Services (JIFS) and the Jamaica Bankers Association (JBA), under the theme: ‘Fraud and the Financial Services Sector – Prevention and Detection’, at the Terra Nova Hotel in St. Andrew, on September 10.

Emphasising that “prevention is better than detection,” Mr. Felice argued that if institutions are at the stage where they are attempting to detect the occurrence of fraud activities in their operations, “that means you have a problem.”

“What you should do is institute preventative measures; and that’s where you should be putting your investments, to prevent fraud taking place in the first place. Everything (in finance) is becoming risk-based… so you need to look at the risks. When you identify your risks… you can then put your control strategies in place to manage those. So, you need to start a risk register,” he said.

Mr. Felice advised that come 2015, when Jamaica is assessed by the Caribbean Financial Task Force, the organization will be examining how well the country manages financial risks.

“It is a requirement now, for financial institutions to conduct risk assessments on their customers…specifically how they do their banking. They will come to the FID and (ask) what are our top 10 risks and what are we doing about them. They will also ask financial institutions if they have  a risk register. These are requirements from the International Monetary Fund (IMF), the World Bank, the Inter-American Development Bank (IDB), and the United States Foreign Account Tax Compliance Act (FACTA),” he outlined.

The one-day seminar was held to heighten awareness about the impact of fraud on the financial services sector and the wider society, and to provide possible solutions for containment, and protection of institutions’ operations.

The forum was attended by supervisors and managers from the commercial/retail banking, security, internal audit, and information technology areas of the financial services industry.

Other speakers included Director of Financial Crimes Compliance, at the American entity, Alix Partners, Sven Stumbauer, who spoke on the topic: ‘Emerging Threats – Fraud in the Global Market Place’; and President of the firm, Yalamanchili Americas , Inc, Dr. R.C. Yalamanchili, who presented on the theme: ‘Management’s Responsibility in Preventing/Detecting Fraud’.