PSFA Issues Updated Guidance on Fraud Risk Assessments

Key points from the guidance include: 

➡️ Clear Risk Definition: Firms are expected to articulate fraud risks by identifying the potential perpetrators, methods, and impacts rather than relying on generic risk statements. 

➡️ Control Effectiveness Focus: Organisations should assess whether preventative and detective controls operate as intended, identify weaknesses, and understand residual risk levels. 

➡️ Named Risk Ownership: Each fraud risk should have a clearly assigned owner responsible for managing, escalating or accepting the risk within agreed tolerances. 

➡️ Dynamic Assessments: Fraud risk assessments should be reviewed regularly and refreshed following business changes, control failures or emerging threat developments. 

✅ Firms should ensure their fraud risk assessments are robust, clearly owned, regularly reviewed, and aligned to evolving financial crime risks, leveraging the best practices highlighted in the guidance. 

💡 Plenitude’s Fraud Prevention Services conduct independent assessments of existing strategies, rules, technology and operational processes to improve fraud detection rates, enhance the customer experience and reduce fraud losses. Visit our website for more information: https://www.plenitudeconsulting.com/services/fraud-prevention-services