BOSTON — A new survey of financial firms finds internal fraud is a significant problem.

Forty-three percent of financial firms surveyed by Aite Group said that at least 5% of their total fraud losses come from internal fraud, costing them hundreds of millions of dollars collectively. Fourteen percent said they suffered at least 10% of fraud through internal fraud. On average, institutions in the Aite Group survey said internal fraud prompted 4% of their fraud losses.

In an analysis, Aite Group said it believes the estimates are most likely on the low side, since many financial firms are "not keen to discuss the issue," especially those that have built a brand on trust and experience.

In cases of internal fraud, 35% of the 35 firms in the survey reported prosecuting 10% or less of their confirmed internal fraud cases.

To battle the problem, Aite recommended that financial institutions use a layered approach of collaborative and analytic fraud mitigation techniques to lessen the risk from internal fraud, which it defined as applying to a variety of criminal behavior perpetrated by a firm's own employees or contractors.

Internal fraud generally falls into three categories: theft from customers, theft from the firm, and abuse of position, said the firm.

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