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FRM Part II · FRM Exam Part II · Case Study: Financial Crime and Fraud

A bank's whistleblowing programme receives few reports, and an employee survey shows staff fear retaliation and doubt that reports will be acted on. Which action would most directly improve fraud detection through this channel?

The bank should provide an independent, confidential reporting line with anti-retaliation protection and visible follow-up. Staff are not reporting because they fear retaliation and doubt action, so trust, independence and demonstrated responsiveness are what will make the whistleblowing channel an effective fraud-detection control.

  1. AProvide an independent, confidential reporting line with anti-retaliation protection and visible follow-up on reportsCorrect
  2. BRaise the monetary threshold at which transactions are reviewed
  3. CMove fraud investigations entirely into the business line where the concern arises
  4. DReplace the channel with an annual employee-satisfaction survey

Explanation

Whistleblowing works when staff trust that reports are confidential, free of retaliation and investigated. An independent line with protection and visible follow-up addresses the stated fears. Raising thresholds reduces detection, business-line investigation creates conflicts of interest, and an annual survey is not a reporting mechanism.

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