According to several recent studies, cases of fraud are on the rise. This rise is a threat to businesses worldwide, whether because of the new conditions created by the pandemic or due to factors related to advancing fraud technology. When cases of fraud are identified within a company, it can do serious damage to both its reputation and its interaction with clients and customers. As such, fraud and malpractice are well worth working to eradicate and hinder wherever possible, preventing a serious fraud case affecting your firm.
Due Diligence
There are dozens of different due diligence checks that companies are expected to make. Few of them are legally binding, but they’ve been established in order to protect against any potential for fraud and malpractice. Such checks include:
- Checking each new signed up customer to ensure their identity hasn’t been faked
- Checking the business history of clients and partners to ensure they’re the real deal
- Being extra careful with internal procedures and developments that could open the path to fraud from within your organization
There are, of course, plenty of other examples of when vetting can save a company from harm down the line. The key point here is to check and double-check new relationships to give yourself the best chance of avoiding malpractice and fraud cases.
New Technologies
As fraud technologies develop, so too do those that can help businesses spot, avoid and raise the alarm on cases of fraud. These can be gathered into a wider fraud management system, which is designed to help firms reduce the risk of such issues. In addition, more advanced forms of this software automate the process, which means that you have fewer people watching for fraud in your organization – redirecting human resources to make important, business-sensitive tasks.
Training
Internal cases of fraud and malpractice may often be deliberate and calculated, but those who commit these acts may not necessarily be aware of the illegality of their actions. Therefore, training your staff in the repercussions of committing fraud, or other forms of malpractice, may well help as a deterrent for would-be fraudsters in your firm. This is especially the case for larger firms – say those over 250 employees. As such, firms may find it more difficult to keep track of each employee; a little training can go a long way to prevention and fraud identification.
External Fraud
While internal fraud is an issue that all firms may face from time to time, it’s external fraud that’s particularly concerning – rising year on year at a dramatic rate. External fraud can take many forms, and it’s often simply not possible for firms to know the latest emerging threats before they take root and damage their reputation. A smart way to mitigate the risk of external fraud afflicting your business is to keep up to date with novel risks – shared on Twitter, on security blogs, and in commercial and industry magazines – to keep your security team aware of what to look out for when searching for fraud risks.
Make sure fraud and malpractice are mitigated risks to your company with these four key tips.
