4 tips to protect your business from fraud: keeping your business safe
Correcting an incident of fraud can cost your company thousands of dollars in time, talent, and technology. A fraud prevention plan for your business will give you the peace of mind you need to focus on your day-to-day operations. Here are four essential safeguards to consider implementing to keep your business safe:
1. Segregate Vendor Selection and Billing
When the same person (or department) selects vendors and approves invoices for payment, it will create more opportunities for error or internal fraud. Having a second pair of eyes review important documents will separate these functions. You have a higher chance of catching potential discrepancies and fraudulent activity with this method.
2. Flag Duplicate Invoices
Duplicate invoices are a common threat. If not managing for duplication, the bad actor can slide in an invoice that will look to be legit – just like a counterfeit check. By implementing a system that flags duplicate invoices, you will prevent overpayment and mitigate losses. This flagging system can be automated by matching invoice details like invoice number or vendor name.
3. Implement User Limits for Electronic Payment Origination
It is risky to have too many people initiating electronic payments. Setting user limits based on factors like job function will help mitigate the potential losses caused by compromised accounts. User limits can and should be carefully considered for your business needs and should be reviewed regularly.
4. Establish 2-Factor Authentication (2FA) Wherever Possible
It is best to have 2-factor authentication (2FA) on any application, account, or online program possible. 2FA, like mobile app authentication, hardware or software tokens, and security keys, adds an extra layer of security to make hacking and account takeover harder for fraudsters to accomplish.
Text message verification is a common 2FA method, but it is vulnerable to “SIM swap scams” where hackers take control of a victim's phone number. This type of attack occurs when a hacker convinces a phone company to change the subscriber identity module (SIM) on an account from one device to another. Hackers can then use your phone number to access sensitive information.
Remember to never give out your 2FA codes to anyone, especially if the person requesting the codes started the conversation by calling you. Codes should only be used to log into accounts and for identity verification when you call into an official helpdesk. While no 2FA technology is perfect, any 2FA is better than no 2FA. Enable it when and where you can.
Conclusion
In today’s digital world, safeguarding your account is not an option; it is a necessity. You must establish a routine that includes continuous evaluation of accounts, signers, and online banking users. Create internal controls, audit all financial processes, and have a policy in place to manage proactive procedures and occurrence incident reporting. Always stay vigilant.
Want more tips like these? Check out our 2024 Fraud Best Practices Checklist.
Looking to increase cybersecurity when managing financial data? Check out our Fraud Prevention Solutions and contact your Treasury Management Officer to discuss what measures you can take to prevent cyber fraud from happening to your organization.
