Risk Assessment Case Study. What is the threat? Accounting, Finance

Risk Assessment Case Study
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Risk Assessment Case Study
There is a myriad of risk factors facing financial institutions on a daily basis. Fraudsters are constantly changing their approaches in efforts to bypass the instigated mitigated strategies and manipulate the financial environment. A situation is considered risky if there is a combination of threats and vulnerabilities. According to Kumar “a threat is a potential cause of an incident that may result in harm to a system or organization, and vulnerability is a weakness of an asset (resource) or a group of assets that can be exploited by one or more threats” (Kumar, 2014). From the definitions above, the potentials for losses or theft in a financial institution occur from threats exploiting vulnerabilities. Some of the major threats in the financial scope include hackers, criminals, competitors, and dishonest employees while vulnerabilities comprise of human errors, broken processes and ineffective controls (Sedunov, 2016).
About the case study, a bank clerk used his position at the organization to steal money from a customer’s account. He had the opportunity to change customer details and managed to change the customer’s address to his own, issued an extra card for the account, and then changed the address back again. He withdrew money from ATM’s, and the customer did not notice the thefts for a long time because of the way the bank’s system worked.
What is the threat?
Over the recent past, bank thefts have changed from the brutal incidences where thieves entered bank halls brandishing guns and making away with cash from the vault and teller tills to sophisticated heists where fraudsters manipulate bank systems in collaboration with dishonest employees (Johnson, 2011). Bank employees have access to sensitive information that includes not only the account balances but also personal information such as house and work addresses. Employees in some departments within the bank have the capabilities to change and update the customer details and as such disgruntled and dishonest employees have used that opportunity to manipulate the information to their advantage. Employees who do not observe or practice strict financial management often run into debts and a financial crisis that forces them to engage in fraudulent activities. As a result, they identify the dormant customer accounts within their workspaces which have been “neglected” for some time or accounts with huge balances that the account owners will not easily notice any small transactions done (Sedunov, 2016).
What vulnerabilities exist?
Banks usually have strong policies and measures to mitiga...