Insider Fraud Prevention: Tips & Tricks for Your Organization


Even organizations with productive and loyal employees are prone to malicious insiders who commit fraud. Such activity is not easy to detect because insiders usually mishandle the same data they regularly process as part of their jobs, and do so bit by bit. Also, the motives for committing fraud can be unobvious.


In this article, we define what insider fraud is, what risks it brings, and how security officers can reduce those risks with a comprehensive cybersecurity strategy. We also offer six helpful tips to prevent insider fraud incidents within your organization.


What is insider fraud?


Fraud is any intentional act or omission designed to deceive others with the intent to receive financial or other gain.


Insider fraud refers to an insider’s use of an organization’s information technologies for personal gain. Fraudulent activities can include misusing corporate assets, mishandling an organization’s data, and stealing information to organize an identity crime.


Insider fraud is a severe threat to an organization’s data, including personally identifiable information (PII), confidential information, and intellectual property. It affects various industries and sectors including e-commerce, finance and banking, charities, and healthcare.


The consequences of insider fraud can lead to financial losses, reputational damage, and penalties for noncompliance with cybersecurity requirements.


Definition of insider fraud by the CERT Guide to Insider Threats


Insider fraud is usually committed by employees who legitimately take part in the same kinds of activities they use to commit fraud as part of their work routine. For example, while processing sensitive data for work purposes, an employee can steal or modify small pieces of data in an unnoticeable manner. Each small fraudulent act brings the malicious insider some benefit. And not being caught can make it easy for insiders to rationalize their misbehavior and continue engaging in it. Malicious insiders may continue to commit fraud even if the pressure or initial motive to do so disappears.


An example of insider fraud is employees issuing false refunds to themselves, as in the case of a former Amazon employee who managed to issue $96,508 in fraudulent refunds to himself and his friends. But sometimes a motive can relate to keeping up with work-related goals. For example, employees of the Fifth Third Bank and Wells Fargo were accused of opening fake accounts without customers’ consent to meet sales goals.


Read also: 7 Best Practices for Banking and Financial Cybersecurity Compliance


Insider fraud often starts with minor rule breaking. But if it goes undetected and punished, the frequency and severity of insider fraud incidents are likely to increase.


The key factors that may predispose someone within your organization to commit fraud are described in the fraud triangle. This is a framework that shows the three main reasons behind an individual’s decision to commit fraud.


Pressure. A person who commits fraud can be pressured by financial difficulties, gambling losses, or drug addiction. Also, they can be bribed by someone outside the organization, or they may simply want to gain profit, driven by greed.


Opportunity. Opportunistic attackers see a chance and take it. Such a chance may present itself in a number of ways:

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


On the contrary, strong cybersecurity policies and checks are likely to diminish the opportunity for performing malicious activity in the eyes of potentially malicious insiders.


Rationalization. Malicious insiders can convince themselves 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 upper management is doing it as well or that the organization can afford some losses.


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


  • 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.


Read also: Shadow IT: What Are the Risks and How Can You Mitigate Them?


Any person within an organization may commit insider fraud. The danger can also come from contractors or business partners who have access to at least some corporate data and resources.


The severity of an incident varies depending on the insider’s position and access rights. For instance, regular employees that have access to at least some client data and accounts can potentially take advantage of their position to sell client account credentials or create fraudulent customer accounts. And if former employees still have access to their accounts, they can commit similar fraud.


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


Malicious third parties like vendors, subcontractors, and partners also can be insider fraudsters if they misuse internal access rights to an organization’s data or systems.


Now, let’s explore what you can do to prevent insider fraud incidents within your organization.


Read also: Cybersecurity Breaches Caused by Insiders: Types, Consequences, and Ways to Prevent Them

How to prevent insider fraud?


To efficiently handle insider-related threats and be able to avoid them, you need to come up with a complex insider risk management strategy that considers various fraud scenarios. It will help you define how to prevent insider fraud incidents specifically within your organization. The four key steps to creating such a strategy are:


1. Know what your employees and third parties do within your organization’s corporate systems and how they handle sensitive data. Make sure to identify the actions of each employee and link them to business processes across the organization’s environment.


2. Detect abnormal behavior in real time to minimize the chances of a security incident. Malicious insiders usually wait for an opportunity to commit fraud. Thus, when dishonest actions start, the activity of malicious insiders typically differs from their normal routine.


3. React to suspicious activity as soon as it’s detected to check whether it’s a threat. Make sure you have the ability to gather irrefutable evidence with visual capture of actual actions and digital audit trails.


4. Repeat these processes consistently and continually adapt them to new behavior patterns, since departments within your organization may grow, be divided, or be eliminated. Thus, employees may gain new responsibilities and access rights with time. Also, you may want to reconsider some of the processes of your insider fraud prevention strategy, since new cybersecurity trends, practices, and technologies may appear, as may new fraudulent schemes.


All of these steps require organizations to make sure their cybersecurity measures can mitigate potential attempts of malicious insiders to commit fraud. Let’s take a closer look at various tips and tricks to help you enhance your cybersecurity strategy and prevent insider fraud.


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

6 tips and tricks to prevent insider fraud in your organization


Let’s outline six best practices that can help businesses from different industries enhance the security of their data and assets and prevent insider fraud activity.


1. Enforce cybersecurity policies


Continually enforcing an organization’s cybersecurity rules and controls reminds employees about their responsibilities, the importance of following corporate guidelines, and the consequences of breaking the rules. By enforcing policies, you can minimize the chances of insider fraud within an organization.


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


  • Clearly documented so employees can easily understand what’s right and what’s wrong. Keep policies short and concise so employees read them and remember them.
  • Carefully explained to help employees understand that the true motivation behind these policies is to secure corporate and user data. Include a section with consequences for not meeting the policy guidelines to make sure employees adhere to them.
  • Regularly revised and updated to keep up with modern cybersecurity trends and to be ready for new types of insider threat activities.
  • Consistently enforced to make sure all users within the organization follow recommended cybersecurity practices. Raise policy awareness with regular cybersecurity education, training, quizzes, and support resources.


As a comprehensive user activity monitoring tool, 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 breaking rules and remind them about corporate cybersecurity policies.


Read also: Privileged Password Policy Compliance Overview: NIST 800-63, HIPAA, PCI DSS, GDPR


2. Pay special attention to privileged users


The more privileges employees have, the more severe the consequences will be if they commit insider fraud. To reduce the chances of that happening, keep a close eye on the activity of your privileged users.


First, define the levels and types of information and systems privileged users have access to. For example, system administrators are in charge of infrastructure; accountants and financial managers handle financial information and systems; managers and customer service representatives can access client data.


Second, ensure ongoing employee monitoring for privileged users to track and record their activity. Also, while it’s important that employees know they are being monitored, it’s also important that the monitoring software you use doesn’t disturb their work.


With Ekran System, you can benefit from a ready 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 there were any suspicious actions
  • Immediately act whenever a privileged employee attempts to perform a prohibited action or behaves suspiciously
  • Apply the principle of least privilege by granularly assigning access permissions


Learn more about using Ekran System forPrivileged User Management


3. Limit access to sensitive data and resources


Make sure to regularly check whether your employees have only the access rights they need for day-to-day activities. For example, customer service workers may need a client’s contact information, but access to financial information is likely unnecessary for them.


By limiting access to sensitive data and systems, you minimize the chances for insider fraud incidents. Also, you narrow down the number of potential suspects in case an incident occurs.


Ideally, access rights should be revised each time an employee switches to another project, switches departments, or takes a new position. Otherwise, people can accumulate privileges over time.


Also, make sure to establish controls that will alert your security team whenever sensitive information is accessed, modified, or downloaded.


A great approach to limiting access is to apply role-based access control. This method defines employee roles and corresponding privileges, assigning a role to every employee. Each role has a set of permissions and restrictions within the organization’s IT perimeter. Thus, a person can access certain data and resources only if their role in the system has the required permissions.


To limit and secure access to 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 approach to access management to minimize cybersecurity risks
  • Secondary user credentials for shared privileged accounts to associate every session initiated under a shared account with the specific user who started it


Learn more about using Ekran System for Privileged Access Management (PAM)


4. Monitor and record employee activity


To minimize the chances of insider fraud, ensure that your employees handle data securely by continuously monitoring user activity within your organization’s infrastructure.


With employee activity monitoring, your security officers can watch any session live or examine it later in recordings. This may help you not only investigate an insider fraud incident if it occurs but even prevent one. For instance, if an employee behaves suspiciously, your security team can analyze their session recordings to look for any dishonest actions like sharing sensitive data via email.


With Ekran System’s employee monitoring capabilities, you can:

  • Establish ongoing user monitoring with configurable video quality
  • Capture additional employee activity logs like keystrokes, launched applications, opened websites, and entered commands
  • Easily search by keywords within current sessions and across recorded sessions to find whether an employee took a certain action


Learn more about using Ekran System forEmployee Monitoring


5. Conduct an insider risk assessment


To efficiently handle insider fraud incidents, you should know what to expect and how to mitigate risks before they can cause harm. Conducting an insider risk assessment will help you see the current state of your organization’s cybersecurity, detect existing threats, and enhance data and asset security.


To gather the required data for performing 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


As an insider risk management platform, Ekran System can partially assist you with performing risk assessments. You can leverage employee activity monitoring and user behavior analytics to check whether your employees and vendors apply unsecure practices that may result in data leaks or other cybersecurity incidents. You can also set custom rules to receive reports with specific data for which you need updates.


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


6. Detect and review suspicious activity


Insider fraud is often opportunistic, which means that a malicious insider will perform an action they don’t normally do: initiate a financial transaction outside working hours, upload files to an external USB drive, or send an email with an unusually heavy attachment.


The good news is that your security team can automatically detect such activity, check whether it threatens the organization’s cybersecurity, and prevent data leaks.


Ekran System offers a wide set of features to help businesses instantly detect potential insider fraud and prevent incidents:


  • Rule-based alerts that notify your security officers about employees performing prohibited or potentially threatening actions
  • Configurable automated responses to incidents: depending on the risk level of an action, you can automatically send a warning, block the user, or end the session
  • Logging of all USB connections and alerts if an unauthorized device is connected
  • Real-time notifications about suspicious user behavior thanks to Ekran System’s user and entity behavior analytics (UEBA) module


Learn more about using Ekran System forUser Activity Alerts and Incidents Response



Insider fraud prevention requires you to ensure that employees only have access rights to the resources they need for work purposes. And to monitor user activity and detect abnormal behavior, you’ll need functionality like UEBA, real-time alerts, and user activity monitoring reports that you can later analyze.


With Ekran System, you can effectively deter, detect, and disrupt insider threats, including insider fraud incidents. Its advanced monitoring functionality together with a rich set of features for incident detection and response will help you protect critical endpoints. Keep an eye on all users who can access your organization’s data and prevent data abuse.


Request a 30-day trial to see how Ekran System can help you prevent insider fraud!