Financial institutions (FIs) with loosely monitored wire transfer systems are highly vulnerable to the risk of loss. With many FIs transmitting wires that exceed their total assets in any given day, a fraudulent wire transfer could easily drive an institution out of business. Wire transfers come in two forms: outgoing and incoming. Of the two, outgoing wires entail more risks because the originating company no longer has any control over the final disposition of the wired funds. However, incoming wires are not without risks. It is possible for incoming funds to be intercepted and diverted to another account and then withdrawn in cash. Fortunately, there are measures that can be taken to minimize such risks. One is the separation of duties to make sure that no one can single-handedly initiate, verify and transmit outgoing wires or divert incoming wires to unauthorized accounts. More important is the proper deployment of wire transfer system access controls.
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