Why Dual Control Matters

Dual control is one of the most important ways that financial institutions can help business owners fight cyber fraud. And the threat of cyberattacks continues to grow: During the first half of 2021, the banking industry reported 30% more ransomware attacks than in all of 2020, according to the U.S. Treasury's Financial Crimes Enforcement Network. Federal Reserve Chairman Jerome Powell has warned that cyberattacks represent the No. 1 risk to the global financial system.

Business owners who want to protect their accounts should ensure that their financial institutions provide dual control.


What is Dual Control?

Dual control is just what it sounds like: It requires two different users to initiate and approve all outgoing payment orders or user authorization changes.


How Does Dual Control Work?

Dual control basically requires two separate people to authorize or initiate a transaction or a change in user administration. The first person, known as the maker, creates the request. The second person, known as the checker, checks and approves the transaction or user change. When both the maker and the checker have signed off on a transaction or user authorization, it can be set into motion.


What Are the Benefits of Dual Control?

Dual control helps prevent human errors by requiring an additional set of eyes on each transaction or user changes. Dual control provides accountability and an extra layer of protection from account abuse internally, as well as providing a barrier to fraud from external parties who might have gained unauthorized access to an account. 

Dual control offers a number of benefits to your business, including:

Avoiding Payment Scams

Cyber criminals can sometimes get around the digital checks and balances required to complete transactions. With dual control, every transaction or user change is double-checked by another human before it is authorized.

Deterring Internal Fraud

You may trust your employees completely, but employee embezzlement is an unfortunate reality. By requiring dual control for transactions, you can make it much more difficult for an employee to conduct illicit financial activity against your business.

Reducing Human Error

Even the best employees (and business owners) sometimes make mistakes. Dual control ensures that financial transactions will be double-checked with an additional set of eyes, helping to avoid potential errors.

Fighting Hackers

Through phishing and hacking and business email compromise, would-be criminals can sometimes access an employee's sensitive information, such as login data. Dual control can prevent a hacker from completing a transaction or user change because actions require two separate employees to log in and verify.

This article is for general information and education only. It is provided as a courtesy to the clients and friends of City National Bank (City National). City National does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors or persons quoted as of the date of the article with no obligation to update or notify of inaccuracy or change. This article may not be reproduced, distributed or further published by any person without the written consent of City National. Please cite source when quoting.