Socgen IT staff hold key to improving trader fraud defences

Societe Generale IT staff will be a deciding factor in whether the bank's programme to prevent a repeat of the £3.6bn rogue trader fraud succeeds, according...

Societe Generale IT staff will be a deciding factor in whether the bank's programme to prevent a repeat of the £3.6bn rogue trader fraud succeeds, according to a report published by the French bank last week.

The bank is spending £80m over the next two years including "significant IT investments" to prevent a repeat of the unauthorised trading activity carried out by Jermain Kerviel in January,

The bank's IT infrastructure has weaknesses, according to the report. IT improvements will contribute to a "considerable workload" for the overall programme of improvements.

"The capacity of the IT department to respond to all of the demands will be a determining factor in the programmes success," it said.

The bank has almost 200 people working on improving the its defences, which include improving the security of the IT infrastructure and applications, the control of IT user access rights and improving systems to detect inappropriate activity from within the company.

These include regularly changing passwords for sensitive applications and reinforcing access controls.

The report said work is under way and that the bank would continue to spend money on improving IT systems when initial projects are complete.

"These projects, which have already been launched, will for the most part be completed during the first half of 2009, although investment in IT will continue into 2010," said the report.

Bob McDowall, analyst at TowerGroup, said it is important for the bank's reputation to be seen to be spending money on IT security. "The main area is security related and Socgen is investing in biometric technology which is quite expensive and will require elaborate processes."




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