Fraud is a serious problem for any business.
Roughly one in four small businesses is affected by fraud every year – last year, according to the National Fraud & Cyber Crime Reporting Centre, fraud losses were calculated to be around £18.9 billion. The biggest lesson to take away for any business looking to protect against fraud is that no organisation is safe and no enterprise is too small to be targeted. But where do the most significant fraud threats arise and how can you protect against them?
Poor internal security
Many of the most common – and repeated – problems that arise when it comes to fraud are the result of poor security. This is an issue that is very easily fixed and yet many businesses fail to ensure that staff are accessing systems in a secure way. Passwords are the most obvious gatekeepers – a good, strong password protects accounts and systems from the multiple third parties who would like to gain access to the data within them. And yet, the most common passwords in use are still “password” and “12345,” neither of which is likely to take long to break.
Your own employees
All too often, frauds and security breaches are the result of something as simple as a phishing email or an employee who has clicked on a malicious link. Employees are the biggest fraud threat to any business, not through any conscious intent but usually as a result of a lack of training and the inability to recognise what might be fraudulent behaviour. Invoice fraudsters, for example, might have just enough information to convince an employee that they are genuine because that person hasn’t been trained to spot an imposter – and the results could be disastrous.
It’s important that everyone in your business understands the importance of physical security when it comes to preventing fraud. That means keeping filing cabinets locked, ensuring devices that contain sensitive data are locked away and taking care of company property, such as laptops, that could be used to access a network. It’s much easier to prevent fraud if you don’t leave an open door for the fraudster to walk straight through.
If everyone in your organisation has unlimited access to all parts of the system and all of your company data then the risk of fraudulent activity immediately goes up. It doesn’t necessarily require a malicious intent for those within the business to create a fraud risk – carelessness or a lack of understanding can have the same result. Introducing access controls to police who has access to what will help to prevent fraud. Encryption can also be a very useful tool as long as only a limited number of individuals have access to the encryption key.
Protecting your enterprise from fraud is crucial to business continuity. If you’d like to find out more about how the right financial software can help you to do this, get in touch with FinanSys today.