Assessment or Consideration of Internal Control
I. Policies and Procedures Manuals
Company: San Miguel Corporation
Description: Describe the company’s policies and procedures for the
review, approval or ratification, monitoring and recording of related
party transactions between and among the Corporation and its parent,
joint ventures, subsidiaries, associates, affiliates, substantial
stockholders, officers and directors, including their spouses, children
and dependent siblings and parents and of interlocking director
relationships of members of the Board.
Source: https://www.sanmiguel.com.ph/storage/files/reports/SMC-ACGR_updated_2_March_2017.pdf
II. Narrative Description
Company: Globe Telecommunications
Description: Fraud Detection Systems at Globe Telecom
Fraud detection is a critical element in Globe Telecom’s internal control
framework. The company employs advanced systems and processes to
detect, prevent, and mitigate fraudulent activities within its operations,
ensuring both the security of customer data and the integrity of its
financial transactions. These fraud detection systems are designed to
handle various types of fraud, including unauthorized service access,
account takeovers, billing fraud, and payment fraud. Below is a detailed
description of how Globe Telecom implements fraud detection within
its systems:
1. Real-Time Monitoring and Data Analytics
Globe Telecom utilizes real-time monitoring and advanced data
analytics tools to detect irregularities and patterns indicative of
fraudulent behavior. These systems track a wide range of activities,
such as:
Unusual Call Patterns: Fraudulent activities often involve abnormal
calling patterns, such as high volumes of calls to premium-rate numbers
or international destinations. The fraud detection system can identify
and flag such behaviors for immediate review.
Abnormal Usage: The system monitors data usage and SMS sending
activity for suspicious spikes or unusual behavior. It can flag instances
where customers are utilizing services in a way that deviates from their
typical usage patterns.
Geographical Irregularities: Fraudulent activities like SIM card cloning or
account takeovers often involve geographic inconsistencies, such as the
same account being accessed from multiple locations simultaneously.
The fraud detection system tracks these anomalies and flags them for
investigation.
2. Predictive Fraud Detection Models
Globe Telecom employs predictive fraud detection models that use
machine learning and historical data to predict potential fraud
scenarios. These models analyze patterns and trends from previous
incidents of fraud, allowing the system to:
Identify High-Risk Accounts: Based on historical data, the system can
classify accounts as high-risk or low-risk. Accounts identified as high-risk
are subjected to enhanced scrutiny, including additional verification
before completing transactions.
Preventative Measures: The models can also flag transactions that
closely resemble fraudulent activities based on known patterns,
proactively preventing certain types of fraud before they occur.
3. Automated Fraud Alerts and Alerts Management
Fraud detection systems at Globe Telecom generate automated fraud
alerts when an anomaly is detected. These alerts are forwarded to
specialized teams for immediate investigation. The system’s ability to
categorize alerts according to severity allows fraud prevention teams to
prioritize responses effectively.
Escalation Procedures: When a fraud alert is triggered, the system
initiates an escalation procedure, routing the alert to the appropriate
department or team (e.g., customer support, IT security, or finance).
Customer Notifications: In cases where customer accounts are
potentially compromised, Globe Telecom’s fraud detection system can
automatically notify affected customers via SMS or email, prompting
them to take actions such as changing their account details or
contacting customer service.
4. Multi-Factor Authentication (MFA) and Verification Processes
To prevent unauthorized access to customer accounts or services,
Globe Telecom incorporates multi-factor authentication (MFA) into its
fraud detection system. MFA requires customers to provide multiple
forms of verification before accessing sensitive information or making
certain transactions.
SMS/OTP Verification: Globe uses one-time passwords (OTP) sent via
SMS to authenticate customer transactions, such as online payments or
account changes. This serves as a second layer of security beyond just
passwords or PINs.
Biometric Authentication: For higher security, Globe also supports
biometric authentication, such as fingerprint or facial recognition,
especially when accessing sensitive services via mobile apps or online
platforms.
5. SIM Swap and Identity Theft Protection
SIM swap fraud, where criminals impersonate a legitimate user and
swap their SIM card to gain access to their mobile account, is a
significant threat. Globe Telecom employs fraud detection systems to
identify and prevent SIM swap activities:
SIM Swap Detection: The system monitors for requests that appear
suspicious, such as multiple requests for SIM swaps from the same
account or rapid changes in account details. If an anomaly is detected,
the system flags the request for additional manual verification before
processing.
Identity Verification for Sensitive Requests: Globe Telecom enforces
strict identity verification protocols for any requests that involve
changing key account details or performing sensitive transactions,
ensuring that unauthorized users cannot access customer information.
6. Collaboration with External Fraud Prevention Networks
Globe Telecom also collaborates with external fraud prevention
networks and industry associations to stay ahead of emerging fraud
trends and improve its internal detection capabilities. This allows Globe
to share insights and best practices with other companies in the
telecommunications industry and stay updated on the latest fraud
tactics.
Industry Threat Intelligence: Globe participates in fraud prevention
consortiums and information-sharing platforms that help them gather
intelligence about new fraud schemes that are circulating in the
telecom sector.
Cross-Industry Collaboration: Globe Telecom collaborates with banks,
e-commerce companies, and other service providers to detect and
prevent payment fraud. These cross-industry partnerships help identify
fraudulent activities that could impact a wide range of services,
including mobile payments and online transactions.
7. Post-Fraud Investigation and Resolution
When fraud is detected, Globe Telecom’s fraud detection system
triggers an investigation process. The following steps are involved:
Incident Analysis: A dedicated fraud investigation team analyzes the
incident, gathering relevant data and reviewing transaction histories,
customer activities, and potential vulnerabilities.
Root Cause Analysis: The team performs a thorough root cause analysis
to understand how the fraud was perpetrated and identify any
weaknesses in the system that may have been exploited.
Corrective Actions: Based on the findings, corrective actions are taken
to prevent future incidents. These could include implementing
additional security protocols, updating the fraud detection algorithms,
or strengthening customer verification processes.
8. Customer Education and Awareness
Globe Telecom educates its customers about fraud risks and
prevention methods. This includes sending out regular notifications via
SMS, email, or through the company’s app, advising customers on how
to protect their personal information and recognize potential fraud
schemes.
Fraud Awareness Campaigns: Globe Telecom runs awareness
campaigns to educate customers on issues like phishing, social
engineering, and how to securely manage their account credentials.
Security Features: The company also promotes security features such as
strong passwords, multi-factor authentication, and account monitoring
options to help customers protect their accounts from fraud.
Source Reference: https://www.globe.com.ph/
III.
Flow Chart
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