Businesses today face many financial risks, from internal fraud by trusted employees to sophisticated schemes initiated by international criminal networks. It makes sense for your organization to have multiple layers of security in place when managing business finances. One tool to help protect your company against both internal and external fraud is Dual Control.

What is Dual Control?

Dual Control is a system control within Nevada State Bank’s online banking solutions: Treasury Internet Banking or Premium Internet Banking. It requires that two separate people authorize and complete a transaction or payment, such as a wire or ACH transfer. The first person, or initiator, is responsible for creating the request (a wire or ACH) while the second person, the approver, checks and approves the activity.

Benefits of Dual Control

Dual Control can:

  • Reduce the risk of fraud by requiring that two users are involved in any transaction.
  • Decrease errors by having a second user review ACH or wire transactions before they are submitted.
  • Increase back-up availability if multiple authorized users have the ability to approve transactions, ensuring that your company can process transactions while users are out of the office or on vacation.

Help Protect Yourself From Multiple Risks

Dual Control can add a layer of protection against the following types of operational risk:

Payment Scams: While a fraudster may be able to trick one person, having a second person review and approve a transaction ensures a second look, which can help identify fraud before any money leaves the account. Payment scams can take many different forms, including Business Email Compromise schemes. Click here for information about this increasingly common scam.

Compromised Credentials: Fraudsters can use advanced techniques to steal usernames and passwords, and then log into business accounts and divert funds. With Dual Control, even if a criminal was able to compromise one of your online users’ credentials, it’s highly unlikely the transaction would be completed, since a second user would have to approve it.

Internal Fraud: While all businesses want to believe their staff is trustworthy, the reality is that a significant number of companies have been defrauded by an employee. Industry data indicates that private companies and small businesses rank highest in occupational fraud (internal fraud) compared to large corporations, government agencies and nonprofits. The biggest contributing factor is the lack of internal controls.

Small businesses are particularly vulnerable because they are more likely to have one person doing all the bookkeeping or accounting functions. If that person encounters financial problems, it may be tempting (and relatively easy) to dip into company funds. When Dual Control settings are enabled, a single user is prevented from creating, and then initiating, an ACH batch transaction or transmitting a wire transfer. Dual Control also provides an opportunity for any wrongdoing to be identified early in the process.

Processing Errors: No matter how careful your team members are, they’re only human, and mistakes can happen. It’s helpful to have a second set of eyes on each transaction to catch input errors, which can be not only inconvenient, but costly.

For more information about Dual Control features within Nevada State Bank’s online banking solutions, contact a Treasury Management Specialist at 866-594-2695.