Technology is a double-edged sword for today’s businesses. While advancements can boost efficiency and increase the speed of doing business, they also introduce risks. And as technology becomes more advanced, aspiring fraudsters follow suit. “In this environment, where we’re seeing speed-to-payments, it’s crucial to ensure that the business has a solid focus on internal security procedures and controls,” says Mike Kelley, enterprise authentication manager, SunTrust Bank.
Nearly half of global organizations say they’ve been victims of fraud or economic crime during the past two years—up from 36 percent in 2016.1 Not only can this have a financial impact; fraud can also hurt employee morale and brand strength.2 Are you and other leaders at your business doing all that you can to combat fraud?
A Tale of Two Business Leaders
Roger allows his office manager, who has worked at the organization for several years, to oversee the vendor relationships. A new vendor comes recommended by this office manager but also works in collusion with her to pad invoices with additional shipping fees and slightly higher prices than originally negotiated. In exchange for looking the other way, the office manager shares in the profit.
This fraudulent activity is allowed to continue for months because no one else is monitoring the transactions.
Patricia routinely vets all new vendors by verifying their assigned tax ID and telephone numbers and confirming business ownership through registration databases. She also cross-references these findings with all employee information to ensure there is not an undisclosed conflict of interest. Finally, Patricia’s organization has established clear segregation of duties—those who authorize orders do not also process payments, for example. That way there are always at least two employees involved in each transaction.