Alexander Schuchter

The Swiss financial industry values pre-employment screenings because they’re considered to be an effective anti-fraud strategy. But what about other preventive measures like corporate anti-fraud training programs? Does it pay off to invest in this area? In 2016, we surveyed 18 Swiss companies — only banks and insurers — about their anti-fraud training programs.1 The findings can be benchmarks for organizations and provide insights into how to enrich programs. Much of our study’s results are easily transferable to any industry in any country. Some ideas could represent a starting point for making anti-fraud training in your organization more powerful. Findings obtained from an online survey and several face-to-face meetings show there’s still room for improvement. At the same time, our respondents provide fascinating insights that could make corporate training more effective. What do we need to think about when developing corporate anti-fraud training programs?

This article revisits the Fraud Triangle, an explanatory framework for financial fraud, originally developed by the American criminologist Donald Cressey from his interviews with embezzlers. First of all, we describe several developmental cornerstones of the Fraud Triangle. Its recent theoretical and practical application is reconsidered. In accordance with the three elements - motivation, opportunity, rationalization - and on the basis of our empirical study of 13 company fraudsters in Austria and Switzerland, we illustrate some within-company measures, which may contribute to a low fraud risk corporate culture. Although opportunity is necessary but not a sufficient condition for ‘upperworld' criminal offences, our respondents regard the perceived pressures they experienced as salient. Rather than rationalizations, there is a ‘fraud-inhibiting inner voice' before the crime, which normally deters an individual from fraudulent behaviour. This inner voice becomes quieter over time until the fraud occurs; at least in their cases. Our interviewees argue that all Fraud Triangle elements - including the inner voice - are highly influenced by the corporate culture in their companies.

We suggest that when using the fraud triangle, academics and professionals should take account of the insights gleaned from our study, in which Switzerland and Austria's "elite" white-collar offenders with high professional standing and respectability were interviewed. Our perpetrators consider that only opportunity is a universal precondition of acts defined by others as fraud, though perceived pressure is salient to most frauds. By contrast, financial incentives are not required to be motivational elements. The frequently cited "rationalisation" is too simplistic: rather, a fraud-inhibiting inner voice before the crime and a guilty conscience after it were present among those interviewed.