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Insider Fraud Prevention: Tips & Tricks for Your Organization


Did you know that even organizations with productive and loyal employees frequently suffer from malicious insiders committing fraud? Such insiders are rather difficult to detect because they mishandle data bit by bit alongside their regular work routine. Moreover, their motives can be unobvious, which makes detecting them even more challenging.  

In this article, we explore insider fraud and its risks, as well as how to mitigate those risks through a comprehensive insider risk management strategy. We also offer six insider fraud prevention tips to help you minimize the risk of security incidents within your organization.

What is insider fraud?

Insider fraud occurs when someone within an organization exploits sensitive information for their own benefit. The two biggest reasons why malicious insiders commit fraud are financial gain and intellectual property theft. 

Why is insider fraud prevention so important? Because fraudulent activities can involve misusing your corporate assets, mishandling your sensitive data, and stealing your critical information to organize an identity crime. Insider fraud may pose serious threats to your organization’s data, including to personally identifiable information (PII), confidential information, and intellectual property.

Insider fraud incidents may happen in any industry or sector including e-commerce, finance and banking, charities, healthcare, research, and IT.  

The consequences of insider fraud may involve financial losses, reputational damage, and penalties for non-compliance with cybersecurity requirements.

what is insider fraud

Insider fraud prevention definition by the CERT Guide to Insider Threats

Insider fraud is usually committed by employees who have legitimate access to the information they exploit for their fraudulent actions. For example, when malicious actors handle sensitive data as part of their job responsibilities, they can easily steal or manipulate small portions of data in an unnoticeable manner. The danger lies in the incremental nature of these actions, as even a minor fraudulent act provides the insider with some personal benefit and, consequently, poses a threat to your organization.

And if security officers don’t detect fraudulent activities in time, insiders may rationalize their misbehavior and continue engaging in it. When insider fraud incidents go unnoticed and unpunished, the severity of malicious activities increases. 

Between 2020 and 2022, the number of insider threat incidents rose 44% according to the 2022 Cost of Insider Threats Global Report by the Ponemon Institute. Their costs increased too — the average incident cost $645,997 to an organization in 2022. Alongside this, the mean time to contain an incident increased from 77 days to 85 days over this period.

Case #1: Theft of Yahoo’s trade secrets by an employee

Case #1: Theft of Yahoo’s trade secrets by an employee

Case #2: Apple claims two former engineers have stolen chip design secrets

Case #2: Apple claims two former engineers have stolen chip design secrets

7 Best Practices for Preventing Intellectual Property Theft

Main triggers for committing insider fraud 

The key factors that may predispose someone within your organization to commit fraud are described in the fraud triangle by criminologist Donald R. Cressey. This is a concept that explains the three main reasons behind an individual’s decision to commit fraud.

Fraud triangle

Pressure. Financial difficulties, gambling losses, or drug addiction can pressure people to commit fraud. Also, someone outside the organization can bribe your employees, or fraudsters may want to profit, being driven by greed.

Opportunity. No matter how disgruntled your employees might be, they can commit fraud only if they’re given a chance to do so. Such a chance may present itself in a number of ways:

  • Unlimited access to valuable information and critical assets
  • Absence of access controls and employee activity monitoring
  • Weak security within an organization’s IT infrastructure

On the contrary, strong cybersecurity policies and checks are likely to prevent opportunistic insiders from performing malicious activity.

Rationalization. Fraudsters can convince themselves that they have a valid reason to commit fraud. For instance, they might think they aren’t paid enough and there’s no other way to deal with this problem. Another example of fraud rationalization is that malicious insiders may think that their organization can afford some losses.

What are the main types of insider fraud?

Depending on the goal of malicious insiders, fraudulent activity can be related to data misappropriation or financial matters:

Insider fraud types

  • Data misappropriation. This type of fraud involves stealing or misusing an organization’s sensitive and confidential information. Risks include disclosing customer information, intellectual property, or other sensitive information.
  • Financial fraud schemes. Employees that have access to corporate payment systems may issue unauthorized payments, access client accounts, or create inaccurate invoices for personal benefit. Another type of financial fraud is using corporate credit cards for personal purposes.

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Who can commit insider fraud?

Not only people within your organization may commit insider fraud. The danger can also come from contractors or business partners with access to your corporate data and resources.

Who can commit insider fraud

The severity of an incident varies depending on the insider’s position and access rights. For instance, regular employees that have access to client data and accounts can potentially take advantage of their position to sell client account credentials or create fraudulent customer accounts. The same goes for former employees that still have access to their accounts.

Privileged users who have access to more sensitive data and corporate systems may commit more severe crimes. For instance, they may use accounting systems to run a money laundering scheme or issue payments or loans to accounts they or their accomplices control. 

Third parties such as vendors, subcontractors, and partners can also commit insider fraud if they misuse internal access rights to an organization’s data or systems. Unfortunately, the percentage of insider incidents perpetrated by business partners typically is quite high and ranges between 15% and 25% across all insider incident types and industry sectors. 

As you can see, threats may come in a number of ways and forms. But how can insider fraud be prevented within your organization? Let’s discover the most effective ways!

7 Examples of Real-Life Data Breaches Caused by Insider Threats

How can you prevent insider fraud?

To avoid or efficiently mitigate insider-related threats, consider developing a comprehensive insider risk management strategy that covers various fraud scenarios. Such a strategy can help you define how to prevent insider fraud incidents within your organization. The four key steps to creating an effective insider risk management strategy are:

How to prevent insider fraud

1. Know what insiders do. You should keep an eye on what your employees and third parties do within your organization’s corporate systems, as well as how they handle sensitive data. For this, you can implement a robust user activity monitoring solution. 

2. Detect abnormal behavior. If you detect abnormal behavior in real time, you’ll significantly minimize the chances of a security incident. As already mentioned, bad actors usually wait for an opportunity to commit fraud. When they start acting maliciously, their behavior within the network differs from their regular behavior. In this case, user and entity behavior analytics (UEBA) tools can be exceptionally useful in detecting suspicious behavior.  

3. React to suspicious activity. It’s critical to react to any suspicious activity as soon as you detect it. Consider deploying an incident response solution that will enable you to check abnormal user sessions in real time, automate incident response actions, and gather irrefutable evidence with video/audit trails.

4. Repeat these processes. Consistently and continually review all these processes and your overall insider risk management strategy. Regularly update and adapt your strategy in response to new cybersecurity trends, practices, and technologies. 

By following these steps, you’ll be able to drastically reduce instances of attempted fraud by malicious insiders. And to further enhance your cybersecurity strategy, take a close look at the useful tips and tricks below.

How to Build an Insider Threat Program [10-Step Checklist]

Six tips and tricks to prevent insider fraud in your organization

Let’s outline the six best insider fraud prevention techniques that can help you protect your critical data and assets from insider threats.

Tips and tricks to prevent insider fraud

1. Conduct an insider risk assessment

You should know how to mitigate risks before they can cause harm. Conducting an insider risk assessment will help you check the current state of your organization’s cybersecurity, detect existing threats, and implement adequate data security measures.

To perform an insider risk assessment, you need to:

  • Identify all critical assets in your organization
  • Define possible insider threats
  • Prioritize risks
  • Create a risk assessment report
  • Make assessing insider risks a regular practice
How to perform an insider risk assessment

As an insider risk management solution, Ekran System can partially assist you with performing risk assessments. You can leverage Ekran System’s user activity monitoring and user behavior analytics capabilities to check whether your employees and vendors apply insecure practices that may result in data breaches or other cybersecurity incidents. You can also generate scheduled reports and receive regular emails with insights on user activity that may shed light on potential insider threats.

Insider Threat Risk Assessment: Definition, Benefits, and Best Practices

2. Enforce cybersecurity policies

Implement strong cybersecurity policies to raise awareness of key employee responsibilities, the importance of following corporate guidelines, and the consequences of breaking the rules. By enforcing clear policies, you can guide and synchronize the cybersecurity efforts of all employees within your organization.

Cybersecurity policies should be

You can’t expect your employees to handle your critical data and systems securely unless your organization’s cybersecurity policies are:

  • Clearly documented so your employees know what’s right and what’s wrong. Keep policies clear and concise.
  • Carefully explained to keep your employees aware of the true motivation behind these policies: securing corporate and user data. Include a section with consequences for non-compliance.
  • Regularly revised and updated to keep up with modern cybersecurity trends.
  • Consistently enforced to make sure all users within your organization follow recommended cybersecurity practices. Raise policy awareness with regular cybersecurity training and quizzes.

As a comprehensive insider risk management platform, Ekran System can help you enforce your cybersecurity policies. For example, you can use Ekran System to automatically send warning messages to employees when they try to perform a forbidden action. This will help you both stop users from violating rules and remind them about corporate cybersecurity policies.

3. Pay special attention to privileged users

The more access privileged employees have, the more damaging the consequences can be if they commit insider fraud. That’s why you should keep a close eye on the activity of your privileged users.

Pay attention to privileged users

First, define the levels and types of information privileged users have access to. Grant privileges accordingly, ensuring privileged users only have access to the specific data needed to complete their required tasks. 

Second, monitor the activity of users with elevated access rights. This is a fundamental security measure that can help you respond effectively to insider threats and mitigate risks associated with data breaches caused by privileged users.

With Ekran System, you can benefit from a fully-fledged toolset for privileged user management, allowing you to:

  • Monitor the activity of employees with elevated access rights to make sure they handle corporate data and systems securely
  • Audit privileged activity to see whether any suspicious actions were detected
  • Immediately respond to user actions whenever a privileged employee attempts to perform a prohibited action or behaves suspiciously
  • Apply the principle of least privilege by granularly assigning access permissions
  • Benefit from two-factor authentication to minimize the chances of unauthorized access to your critical endpoints
  • Implement secondary authentication for shared privileged accounts in order to associate every session initiated under a shared account with a specific user.

4. Limit access to sensitive data and resources

By limiting access to sensitive data and systems, you’ll not only minimize the chances of insider fraud incidents but also narrow down the number of potential suspects in case an incident occurs.

One of the easiest ways to limit access is to apply role-based access control. This method can help you define employees’ responsibilities and give employees corresponding privileges. For example, customer service workers need a client’s contact information but not access to financial information. 

Besides, you can implement mandatory access control (MAC) or discretionary access control (DAC) to manage user access. Learn about the DAC and MAC differences to choose which of the models best suits your organization’s needs.

To help you implement role-based access controls and secure your sensitive data, Ekran System offers various features such as: 

  • Multi-factor authentication to minimize the chances of unauthorized access to your critical endpoints 
  • One-time passwords to grant users temporary access to the most critical resources 
  • Access request, approval, and removal according to the just-in-time access management approach to minimize cybersecurity risks 

Also, it’s recommended to regularly conduct user access reviews. Ideally, you should review access rights each time an employee switches to another project, changes departments, or takes a new position.

5. Monitor and record employee activity

To further reduce the chances of insider fraud, consider continuously monitoring employees’ user activity within your organization’s infrastructure. This way, if an employee behaves suspiciously, your security team can analyze session recordings to look for any malicious actions.

With Ekran System’s user activity monitoring (UAM) capabilities, you can:

  • Record user sessions in video format, accompanied by informative metadata
  • Track users’ keystrokes, launched applications, opened websites, entered commands, and more
  • Easily search within live and recorded user sessions using keywords to find whether an employee took a certain action
  • Track and block USB devices
  • Receive notifications on any suspicious user activity to investigate and disrupt security threats

6. Detect and review suspicious activity

Insider fraud often involves a malicious insider performing an unusual action: initiating a financial transaction outside working hours, uploading files to an external USB drive, sending an email with an unusually heavy attachment, etc.

By deploying insider threat detection software like Ekran System, your security team can automatically detect such activity, check whether it threatens your organization’s cybersecurity, and prevent data leaks.

Ekran System’s wide set of capabilities can help your organization instantly detect and react to signs of insider fraud, allowing you to:

  • Use pre-defined and customizable alerts to notify your security officers about prohibited or potentially threatening actions
  • Configure automated responses to security threats: You can set Ekran System to automatically send a warning message, block the user, or kill a particular process
  • Get notified of all USB connections and block unapproved USB devices
  • Leverage Ekran System’s AI-based UEBA module to automatically detect anomalies in user behavior, such as irregular work hours


Ultimately, preventing insider fraud requires a comprehensive approach. With such an effective insider threat protection solution like Ekran System, you can implement the aforementioned strategies for insider fraud prevention. Thanks to its advanced user activity monitoring, privileged access management, and incident response functionality, Ekran System can help you deter, detect, and disrupt insider threats, including insider fraud incidents.

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