Online fraud is on the rise. This has been exacerbated by the move to remote working due to the Covid-19 pandemic and a focus on balance sheets over security given the looming recession, leaving businesses more exposed to hackers than ever.
The consequences of fraud can be devastating, both financially and reputationally, costing companies billions of pounds a year, according to the UK’s National Crime Agency.
The first step in the fight against fraud is to identify where the risk exists. That involves performing regular fraud risk assessments and implementing and enabling risk and compliance and/or internal audit functions within an organisation.
The rise in fraud is evidenced by Caseware’s trends report 2022, which found that 71% of respondents had experienced a modest increase in fraud, while 35% did not have a fraud prevention and response plan.
The study revealed that 40% of respondents don’t use or are unaware if their organisations use analytics software to mitigate fraud. Thus, it has never been more important for firms to protect themselves against the risk.
Companies also need to proactively carry out regular audits and management reviews to stay on top of the problem. Beyond that, they must create the appropriate channels for reporting fraud and investigating all those cases, as well as adopting technology which efficiently and effectively monitors for red flags.
Next, it’s vital to establish a robust fraud prevention and response plan to stop it happening in the first place or, if it does occur, to stamp it out as soon as possible. By keeping up to date with the latest fraud trends, and continually raising awareness and promoting defence strategies throughout the company, the plan can be successfully executed.
Businesses need buy in from their employees to ensure successful implementation of the plan
“Businesses need buy-in from their employees to ensure successful implementation of the plan,” says James Loughlin, head of data analytics at Caseware UK. “For starters, that means creating a positive culture and work environment in which everyone is pulling together in the same direction.
He adds: “Following on from that, companies must employ effective fraud prevention and detection strategies. They also need to invest not only in their IT, but employee training too, and take immediate action when an incident happens.”
It’s better to nip the problem in the bud before it escalates into something altogether more damaging to the business. That’s why it’s essential to implement and strengthen internal controls and apply clauses to contracts with external parties that allow them to be audited as necessary.
While technology plays a key role in tackling fraud, the software employed is only effective if it’s correctly adopted by its users, therefore they must be fully trained on its use. Firms also need to ensure they update their technology as required to minimise the risk of fraud occurring through their core systems.
As a data analytics solutions provider, Caseware is at the forefront in combatting fraud. One of its solutions, Caseware IDEA, enables companies to detect, analyse and prevent fraud.
By focusing on areas and processes of the business with elevated risks and analysing large datasets to uncover every anomaly, the solution enables the user to quickly identify suspicious or fraudulent transactions. It also strengthens and monitors internal control effectiveness and provides more robust fraud risk coverage and assurance.
The integrated suite can be used to perform ad-hoc analyses of fraud investigations or automate analyses to create more responsive controls that better support risk management and, thus, prevent future issues. All these analyses are captured by Caseware IDEA and can therefore be used as evidence should legal proceedings be taken.
“By enabling customers to efficiently and effectively identify fraud and tackle it before it escalates, they can successfully mitigate the problem,” says Scott Epstein, chief product officer at Caseware. “With online fraud becoming all too prevalent, it’s, therefore, vital that companies have access to solutions which protect themselves against risk.”
For additional info on the software and the business, please also refer to caseware.co.uk/business/idea
