How to Ensure Safety from Fraud Within Your Business | Tech Security
Fraud is a major problem in modern-day businesses. It significantly hampers the progression of business and leads to loss of revenue. Most fraud take places through advanced technology platforms such as hacking. According to PriceWaterhouseCoopers’ evaluation reports, over half of all businesses today have in one way or another suffered fraud. In particular, 88 percent of companies within the United States have suffered fraud that led to subsequent declines in financial performance. This shows the detrimental effects of fraud.
The process of preventing fraud from a business should always start with evaluating a company’s internal and external operations. Depending on where it is orchestrated from, fraud can be divided into internal or external fraud. Internal fraud occurs in numerous forms. The primary forms of internal fraud in most companies are the deeds and misdeeds of employees, which can be handled in various ways.
Implementation of employee monitoring systems
Monitoring of employees is the most efficient mechanism of prevention of internal fraudulent activity. These monitoring systems can include automated systems that record the time which the employee reports to and leave from work. This would prevent the employees from defrauding the company valuable time such as when they report for work late and/or leave early. Installation of cameras within the offices would also be a great way of ensuring that the employees are accountable while at work. It would deter employees from misusing their time .
Auditing is perhaps the most important element of fraud detection and prevention. Audits conducted on a case-by-case basis play a major role in ensuring that any fraudulent activity is detected and prevented. Auditing involves evaluation of systems within the company, such as checking of the transaction records in the bid to determine the flow of cash from one account to another. Inventory checking is also important.
The flow of cash within the company can be done through the implementation of accounting software. These programs raise alarms in areas of potential fraudulent, manipulative activities. In general, auditing creates a sense of accountability among the workers. Case management systems are also vital tools that can monitor employee activity when using computers, therefore helping to validate that employees are working as they are supposed to.
Prevention of external fraud
External fraud is fraud where the perpetrator is outside the company and seeks to infiltrate the company. One of the most conducive prevention mechanisms of this type of fraud is conducting comprehensive background checks. Such background assessments are helpful in determining the integrity of an applicant, therefore ensuring that the hired workforce is as ethics-abiding as possible.
Secondly, it is also vital to install electronic systems and solutions that work towards prevention of external fraud to the company. In this regard, electronic-orchestrated fraud is one of the major channels that facilitate fraudulent activity. To counter such abuse, it is essential to install sophisticated machines. For instance, biometric verification systems can be effective in preventing forged signatures. Such security systems also help keep out thieves who can forge their way through breakable security doors.
Other electronic solutions that can be installed in institutions to prevent fraud include data protection systems that prevent hacking and phishing activities over the internet. Such data protection systems range from basic ones like passwords and firewalls to complex systems such as algorithms that mediate data access by verifying the source of a data access request.
A concern for every business
Prevention of fraud is a major aspect that every business should work on. Ideally, companies have to invest in the development of mechanisms seeking to seal any potential loophole that could be used by fraudsters to perpetrate fraudulent activity. The methods that can be employed in the prevention mechanisms of fraud vary significantly depending on the type of fraud threats facing a business.
About the Author: Rick Delgado is a freelancer tech writer and commentator. He enjoys writing about new technologies and trends, and how they can help us. Rick occasionally writes for several tech companies and industry publications.
Editor’s Note: The opinions expressed in this and other guest author articles are solely those of the contributor, and do not necessarily reflect those of Tripwire, Inc.