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Value of Security

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Question: 
Traditionally, security is a cost center. Has anyone ever measured the actual value of security Maybe it is not as big a cost center; maybe there is added value. I know I have always mentioned things like the dollar amount of counterfeit checks seized in the annual report, but I wondered if someone had some type of ROI calculation?
Answer: 

I have known of a few people who have tried to calculate the value of security deriving a ROI calculation. I have not known of any that have ever been accepted by the financial industry. We can calculate ACH fraud, bank robberies and money recovered, check losses and recovery, cost of guards, and fraud services we use, to name a few. Recoveries on fraud scams against our customers and that monthly $15.00 we receive from probation or parole still shows income to the bank from security.

What we can’t calculate is the number of crimes and robberies security has stopped. I recently received an email from a large regional bank where we performed risk assessments last year. They had a branch in a very rural area. Another bank branch close to them was robbed last week where the robber was shot and killed in that branch’s parking lot. I requested the bank review its video for the last three weeks to see if the robber had been inside the office. If we can find the robber was there, we can prove our robbery procedures worked. Did he not rob it because staff was friendly or did their cameras and the general feel of the office make the robber feel unsafe. Many financial institutions never check after a robbery to see if the criminal had previously been there. No matter what ROI you calculate you can seldom determine how many robberies or frauds that your security stopped from happening. ROI is an accounting term where you can justify many business lines. Unfortunately, security isn’t one of those lines.

First published on 01/26/2025

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