While advancing technology has opened the world up in novel ways, it has also made us more vulnerable to fraud. The value of global online payment frauds alone was at no less than USD 41 billion in 2022. What really drives the number home is the fact that this is double the losses sustained in the year before.
Luckily, there are plenty of ways in which frauds can be prevented too. Here, some key types of fraud are discussed along with the solutions to avoid them. Following this, tips to secure business against fraud on an ongoing basis are discussed.
How to protect your business against fraud
Payment frauds
In a payment fraud, a payment is made in the name of a business, or a person authorised by the business illegally. In a tangible way, this can take the form of forged checks. In the online world, a stolen credit card can be used to make unsanctioned transactions. Plenty of ways exist to prevent payment frauds, however. These include:
- The business could find secure checks that are tamper proof and can’t even be photocopied accurately. This can prevent forgery and duplication.
- Regular monitoring of the company’s transactions to identify any activities that reflect possible fraud can be flagged too.
- Ensuring proper identification methods can also go a long way. These can include the likes of two-factor authentication or the use of biometrics. More simply, just the use of robust passwords can support the prevention of fraud.
Identity fraud
Identity fraud involves obtaining and making use of a person’s or organisation’s data for profit. For example, a line of credit could be accessed with the use of key business data. The defrauded business might not find out anything about this until a later date. Another example is the theft of customers’ information and the use of their cards for illegal transactions. This can affect the business’s reputation besides of course affecting the customers.
Besides taking the same precautions as for payment frauds, a business can also employ the following means to ensure security:
- Data encryption: Encrypting sensitive information like customers’ details or even the business’s confidential data can ensure it’s not readily accessible. As such, it adds yet another layer of security to a business.
- Invest in risk assessment softwares: A business can do well to invest in a software that identifies the areas where fraud can occur too. It can then take necessary steps to ensure that any gaps are sealed.
Insider fraud
Insider fraud can be of various varieties including divulging important business information to third parties for gain. Other examples include embezzlement of funds or payroll fraud that results in inflation of the number of employees.
Some of the measures mentioned earlier work here too. For example, appropriate risk softwares can spot the vulnerable areas. Encrypting data and tracking transaction records can help too. Besides these, companies can also educate employees through training programmes. These can alert them to frauds that exist and their signs. So if they see any signs they can be flagged.
Constantly staying updated
It’s worth bearing in mind that taking measures for fraud prevention isn’t a onetime event. It’s something that has to become the part and parcel of any business’s functioning. As methods to de-risk a business evolve, so do the varieties of frauds that can be committed. Technological advancements and the use of social media to promote business can render any business more vulnerable than earlier.
While investigative services can be hired to understand how a fraud occurs, businesses can even consider hiring them for routine assessments. Having compliance systems in place is another way to ensure proper checks and balances. Other than that, making sure that all the systems in use for official work are fortified with anti-virussoftwares is essential.
Stay alert and safe
Fraud can be a daunting thought, but help is at hand. There are plenty of means to ensure that your business is fortified against attacks from fraudsters. However, it’s equally important to stay vigilant and make risk management an ongoing priority. This can ensure that there’s none to minimal damage to business from ill meaning actors.
