Educational Efforts
As with many risk management initiatives, people are often the weakest link in the authentication chain (i.e., process). Greater awareness by employees and shareholders alike may provide an important defense against fraudulent transactions and against identity theft (which may lead to fraudulent transactions).
Some fund groups provide fraud training to some or all of their employees and seek to raise employee awareness of risks associated with fraudulent shareholder transactions. Such employee training and awareness, often conducted at regular (e.g., annual) intervals, may be specifically focused on customer service representatives who are directly interacting with shareholders, or may extend more broadly to fostering company-wide awareness with respect to fraud issues.
Fund groups often take a variety of steps to raise shareholder awareness about potential threats to their personal information and assets. While not requiring financial institutions to provide such information, regulators have encouraged these efforts as a defense against fraud and identity theft. The U.S. Securities and Exchange Commission’s recent cybersecurity initiative, for example, specifically focused on information that may be given to customers about steps that they may take to reduce cybersecurity risks in conducting transactions.