Managing Risk: Robbery Presented by Allen J. Stendahl
New Risks Continue to Evolve • Plastic card fraud • Counterfeit documents (Nigerian scams) • Identity theft • Indirect lending
Robbery is a Constant • As old as depository institutions themselves • Frequency has remained constant • Severity has increased
Credit Unions vs. Commercial Banks • Average robbery loss is higher in credit unions • Tellers’ cash amount is greater in credit unions • Vault cash is taken more often in credit union robberies
Why? • Greater emphasis on member service • Historically low or no robbery deductible under the bond • Little motivation to control teller cash exposure
What CU’s Have Done… • Surveillance systems • More sophisticated alarm systems • Bandit barriers • Bait money/dye packs • Education and training
Robberies Still Occur • Deterrence and apprehension/recovery • Do not address mitigation • Exposure still exists • Must reduce the amount of cash available
Changes in Bond Market • Deductible amounts are increasing • Bond is experience rated
What Should CU’s Do? • Regularly review teller’s cash needs • Reduce cash levels where appropriate • Split teller’s cash between an upper and lower drawer • Secure excess (vault) cash
Employee & Member Safety • Liability exposure can exceed robbery loss exposure • Education and training are critical • Conduct robbery training regularly • Require all employees to attend
What Else Can CU’s Do… • Robbery warning lights • Comprehensive opening and closing procedures
What about those Kiosks/Teller Pods? • Becoming more popular • More member friendly • Reduce the robbery exposure • Create new exposures
Kiosks, cont. • Employee and member safety an issue • Identity theft exposure increases • What must you do?
Kiosks, cont. • Keep a small amount of cash on hand (include bait money) • Keep terminals secure • Always log off terminals • Avoid allowing a single employee to staff the facility
Summary • Credit unions will always be dispensing cash • Will always be a robbery target • Higher deductibles and experience rating = greater impact on bottom line • Minimize impact by reducing tellers’ cash and total premises cash
Contact Information • Allen J. Stendahl Allen.stendahl@alliedsolutions.net • Patrick Touhey Patrick.touhey@alliedsolutions.net Proud to be a NAFCU Services Preferred Partner. To learn more, please visit www.nafcu.org/allied
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