Fighting Business Fraud Is Going High Tech
According to recent data from the Association of Certified Fraud Examiners, the average business loses around 5 percent of their income per year to fraud. That represents an enormous loss to the average firm – easily enough to halve their profits (or more).
Tackling fraud, therefore, is a top priority. Once upon a time, businesses would hire private investigators and rely on word-of-mouth to detect wrongdoing. But today, the response is becoming increasingly high tech. Companies are investing massively in intelligent systems that can provide them with insight, telling them whether fraud is occurring on their premises or not.
Technology Is Driving A Lot Of The Change
Technology is a double-edged sword. On the one hand, it is helping businesses achieve hitherto unthinkable levels of productivity. But on the other, it is providing new opportunities for scams and deception.
The main problem for firms is the sheer complexity of technology. Many don’t have the requisite in-house expertise to bolster their defenses. They need a degree of automation to keep themselves safe.
The cloud is driving many issues that we see in the community today. Companies need distributed computing to facilitate remote working and attract the best talent.
At the same time, though, it is opening up opportunities for abuse. Passwords are great, but if employees hand access to people not linked to the firm, it can create seemingly intractable problems.
So how are companies using tech to fight fraud? What developments do we see in the community?
Smart Investigation Technology
A lot of businesses fall foul of false positives and false negatives when investigating possible cases of fraud. Banks, for instance, will inadvertently block customer accounts, even for legitimate transactions, thus reducing the quality of their service.
Financial investigation technology, however, is seeking to put an end to this.
The idea is to use smart data collection techniques to reduce incorrect identification of non-fraudulent cases and shine a light on those that are real.
Companies can’t stop all fraud, but they can use software to identify better patterns of behavior that look suspicious and then investigate them further.
Segregation Of Duties
Employee theft is a significant issue at firms. Data from the US Chamber of Commerce suggests that more than three-quarters of employees steal at once in their careers, with a sizable subset stealing many times a year.
There’s a need, therefore, for firms to leverage their most trustworthy colleagues and use them as a barrier against fraud.
Top of the list of priorities, therefore, should be a segregation of duties. This strategy is where you make it clear who is responsible for what. By ring-fencing responsibilities, you reduce company risk by denying any individual employee access to multiple systems.
Limit Electronic Banking Transactions
Criminals will often use banking transactions as a way to siphon money from firms. It is vital, therefore, that companies instill a range of standard practices to reduce the likelihood that this will occur. Two-step authentication, verbal confirmation, and data safeguarding are all indispensable tools in the fight.
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