FinTechCyber Security & FraudCorporates “bombarded” by fraudsters

Corporates “bombarded” by fraudsters

Education and rebuilding communication should be priorities

Education and training around fraud are more important than ever as cyber criminals have increased both the volume and sophistication of their attacks.

“Corporates are being constantly bombarded and the fraudsters only need to have a 0.1 percent success rate with the volume they are using for it to be worth it” says Zoey Newman, managing director and global co-head of the financial investigations practice at Kroll.

Identity and impersonation fraud is becoming more prevalent. A report from Mimecast, an IT security firm found that 60 percent of corporates experienced an increase in impersonation fraud,  as fraudsters target people’s desire to please their bosses.

The lockdown and subsequent working from home has left corporates more vulnerable to fraud. While many of the same control procedures can be accomplished remotely, home working has done away with informal ‘checks’ as employees sit alone, away from their colleagues.

“External wrongdoing is much easier to facilitate and is much more prevalent because people are at home and can’t have those water cooler chats of ‘I just got this weird email, what do you think?’.”

In the same report, which surveyed IT decision-makers between February and March of this year, 60 percent of organisations believe they will suffer an email-based attack in the coming year while 85 percent indicated the volume of email/web spoofing attempts will be the same or greater than last year. A majority also said they do not provide awareness training on a frequent basis.

Newman says the human element is the most vulnerable link and that corporates need to better engage their employees if they are to make a concerted effort to tackle fraud.

“In terms of external threats, it can only be mitigated through proper practical ongoing awareness training. I don’t mean the online video tutorials but having somebody responsible for relaying information regularly about the different types of frauds that are being facilitated. Letting employees be aware of how these frauds are being used to manipulate individuals and creating a culture where it’s okay to question something unusual as opposed to a culture of deference.”

Rebuilding communication

A lack of education leaves gaps in the defences says Zac Cohen, COO at Trulioo, an online verification service.

“Training needs to be a repetitive piece so that individuals understand what best practice is and they’re on the lookout for what tools and attacks to be aware of.”

While technology has focused on building ‘walls’ to prevent fraud from penetrating into an organisation, it needs to help alleviate the communications issues employees are facing in a working from home environment, says Cohen.

“We’ve integrated new buttons and tools into our emailing suite. You can report something as suspicious and that automatically creates a notification for the security team who can then investigate before you take action.

“Organisations need to start thinking about how they can support their staff when they can’t call over their shoulder and ask their colleagues. They need to recreate those communication paths for the remote working environment.”

For both Newman and Cohen the ability to talk about fraud openly is a big enabler in reducing it.

“If you are in a very autocratic organisation, that’s the most dangerous situation. You want a culture of questioning and hand raising without feeling that you’re going to be put at fault,” says Newman.

Cohen adds, “If you don’t talk about it, you’re going to become more susceptible. If you try sweep these things under the rug, you’re going to see it happen more often. People make mistakes, it’s part of human nature.”

Corporates continue to struggle in dealing with fraud as UK businesses of all sizes reported losing an average £99,830 over the last 12 months, a rise of 14 percent compared to last year, according to a report released by Bottomline technologies, an AP provider.

While Newman has over the past few years seen a rise in external fraud, which is also what most corporates are looking out for as well, she expects a pickup in internal fraud as the pandemic wreaks havoc on the balance sheets of corporates.

“What we saw in the last financial crisis was the internal fraud losses increased as an outcome just because of the pressure to deliver good numbers, which helped to justify fraud. The internal threat of fraud will increase, a lot of it will probably be unwitting at first. Employees don’t suddenly turn bad.”

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