UK fraud has hit a record £1.1 billion as cybercrime soars.
The 55% annual increase of fraud in the UK last year topped £1bn for the first time since 2011. Accountants from KPMG found that while the cost of fraud was higher the number of incidents was lower.
Through the rapid rise of technology and online platforms, more people than ever are falling victim to fraudsters.
Without relevant training and appropriate technology, businesses are almost certain to put themselves in a vulnerable position.
Social Engineering
The method that is starting to become the most popular is known as social engineering. When it comes to fraud, this essentially means confidential information is being passed on in these scams due to those conducting them playing on the victim’s emotions.
Social engineering is the term given to the clever manipulation of the natural human tendency to trust. In terms of fraud, this essentially means confidential information is being passed on in these scams due to those conducting them creating false scenarios in the attempt to play on the victim’s emotions. This could include posing as the CEO, a family member or even a complete stranger.
Businesses need to prepare their workforce to ensure they are resilient against such events.
Protecting your business against fraud falls into three categories:
- People
- Technology
- Processes
People
Ensure your employees undergo up-to-date and relevant training in regards to handling and detecting fraud. This is step one to ensuring the right precautions. It is then important to educate employees in-house on what to expect and what not to expect. With social engineering, email is typically the tool used to gain information. Here are a few tips when dealing with a potential fraud email:
1. Double-check the sender’s name
It’s easier than ever for someone to set up a fake email account claiming to be the CEO. Ensure that the name is spelt correctly with no unusual punctuation or characters.
2. Double-check the email address
Even if the sender’s name looks legit, the email address it has been sent from usually is key to detecting a fraud email. Although at first glance it may appear legit, i.e. joe.bloggs@company.com, when investigating further it is likely the email address will contain random numbers or letters and may also not have the correct domain for your company. Fraudsters are usually tech-savvy and have the ability to manipulate the appearance of these emails.
3. Go straight to the source
If you are still not 100% sure if an email is legitimate, it’s not worth leaving it to chance. Go direct to the person you believe is sending the email and ask them face-to-face if it was them. If this is almost impossible at the time, do not respond until you have confirmation.
4. It’s all about context
A major decision maker on whether this is fraud or not is the context of the email. Although some fraudsters are very clever with their method of attempting to gather information, others will use random scenarios that may not have any relevance to your place of work. Note if the scenario they have created in an attempt to gather bank details is relevant to you personally and the person sending it.
Technology
New and up-to-date technology is crucial in the prevention of fraud. Data solutions, procedures, workflow and improved risk management are key.
The cloud is not going to stop growing. It is going to continue to evolve and become the norm because the business and personal benefits are far too positive. However, any centralised data without the right protocol can become a target.
A managed service provider approach to the protection of data and assets is enabling businesses to concentrate on the tasks at hand, instead of focusing on preventing any security breaches.
As technology advances, we are seeing more breakthroughs in the use of technology to detect fraud.
By developing the appropriate protocols for data protection, such as two-factor authentication, firewalls and implementing email monitoring applications, businesses are ensuring their technology meets the standards of a modern business.
Processes
Internal control is broadly defined as a process, effected by an entity’s board of directors, management and other personnel.
While no company, even with the strongest internal controls is immune from fraud, being aware of the potential risks and how to meet compliance is crucial.
To manage the processes effectively, individual departments work together in an interactive manner, working together increases issue awareness, strengthens communication, reduces the opportunity for fraud and ensures a more comprehensive and robust internal control process.
While technology enables us to perform essential business functions, there are direct correlations between technology, fraud events and the internal control processes.
The technology used by staff needs to be monitored. With the rise of cloud computing, BYOD strategies and company telecommunication devices like personal computers and smartphones need to be reviewed continually. Given how quickly technology is changing, strengthening internal controls in this area revolves around fluid processes as the technology is not static.
By opting for an IT strategy that involves a managed service provider, businesses can remove the stress of conducting their own security audits and monitoring user activity. Instead, the risk is managed externally with the latest technology in place to ensure the maximum possible resilience to potential fraud threat.
The next steps
Businesses need to be aware of the risk they could face on a daily basis. Turning a blind eye is no longer an option. Fraudsters are becoming more dynamic and more strategic in their manipulation to gather confidential and threatening data. By allowing a third party to take control of the monitoring, assessment and security in regards to a business’ assets, organisations are freeing themselves of complete responsibility.
For more information on preventing fraud from affecting your business, contact us today.
