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Necessary Changes for Building a Strong Antifraud Culture

(Updated: 30 August 2023)

Building a strong anti-fraud culture in business is a vital step all business owners’ must take to protect their organization’s reputation, financial stability, and the trust of your stakeholders.

As businesses try to find innovative ways to minimise the threat of fraud on all fronts, whether internal or external, establishing a culture that values ethics and integrity is the foundation for preventing and detecting fraudulent activities within your company.

It takes time and resources to create a robust fraud prevention culture in the workplace, but it is worth the effort. In this article, we’ll explore steps to help you create an anti-fraud culture in your business.

What are the benefits of an anti-fraud strategy?

There are several benefits to having a sound anti-fraud strategy in place for your company.

Let’s take a look at what they are:

  • Reassures clients and stakeholders: Having a strong anti-fraud strategy in place reassures your clients and your stakeholders that the service they are using is safe and secure and tells them that you are serious about protecting your users.
  • Discourages internal fraud: Having a strong anti-fraud strategy in place informs your staff that you are serious about fraud prevention and discourages them from performing any illicit activity.
  • Improves online security: If your business operates in the cloud, having a strong anti-fraud strategy with a robust identity verification process in place, you can restrict your user access for staff or clients on an as-needed basis.
  • Optimize operations and increase speed of transactions: Taking an innovative and preventative approach to fraud by implementing KYC measures can save your business money in the long run. You can also set up automated identity verification to increase the speed and security of transactions, while creating a safer environment.

Building a Strong Anti-fraud Culture in Your Organisation

The first step in developing a strong anti-fraud culture in your organisation is the understanding that fraud impacts all entities, not all fraud can be prevented and fraud can happen any time and anywhere. To minimise the risk of fraud and to improve fraud detection within your organisation, you should consider the following:

  • Establishing commitment in leadership: Managers and CEOs must be committed to ethical behaviour and set an example for the entire organisation. This commitment should be communicated through a clear code of conduct that outlines the company’s values, expectations, and zero-tolerance policy for fraud.
  • Regular staff education and training: It may be extremely beneficial for company’s to set up periodic anti-fraud training for all employees, from top executives to new hires. This training should cover the types of fraud relevant to your industry, red flags to watch for, and reporting procedures. Regular refresher courses can help keep this knowledge fresh in employees’ minds.
  • Establish clear reporting policies: Encourage employees to report suspected fraudulent activities without fear of retaliation by implementing a confidential and anonymous reporting system, such as a whistleblower hotline or an online portal. Be sure to respond quickly to suspected fraud by initiating an investigation, documenting evidence and involving a counter-fraud specialist or the police to minimise the impact of the suspected fraud may have on your business.
  • Set clear departmental boundaries: By dividing employee responsibilities and setting departmental boundaries, means that no single employee has too much control over financial or hiring processes within the company.
  • Establish regular audits and monitoring processes: Conducting regular financial audits by enlisting the services of external professionals can help you identify any irregularities or discrepancies in your financial records. You can also make use of data analytics and monitoring tools to detect potential fraud patterns.
  • Enforce anti-fraud policies: By consistently enforcing anti-fraud policies and holding individuals accountable for their actions, shows employees that you are serious about protecting the company from the threat of fraud and discourages them from performing illicit or fraudulent activities.
  • Strive for continuous improvement: Fraudsters continually adapt, so your anti-fraud culture should evolve as well. Conduct regular anti-fraud assessments and seek opportunities for improvement. Stay informed about emerging fraud schemes and technologies to better protect your organization.

Implementing These Anti-fraud Culture Changes

The first step in implementing these culture changes across your organisation is determining what your current fraud risk is and what fraud prevention measures should be put in place. There is no one-size-fits-all solution that will protect every company from fraud.

Your entire staff needs to be aware of their role in fraud prevention. If you have a group of tech-savvy and informed employees, with training in online security measures, you will already be a step ahead of online fraudsters. Each organisation will be at different stages of their digitalisation, online business and counter-fraud awareness. Human resources and digital resources need to be invested into your anti-fraud culture.  Hiring a professional security firm to assess your company’s exposure to fraud risks and what steps can be taken to make your business operations safer is critical.

5 Stages of Fraud Prevention

Stage 1 – Interested

Your organisation will focus on raising awareness of cybersecurity measures and online fraud risks. You are beginning to shift the corporate culture towards safe online practices and employees are beginning to understand why countering fraud is important for organisational success.

Stage 2 – Invested

You have moved on from sharing basic information and promoting the idea of cybersecurity. Your company is now looking to invest some resources into anti-virus and anti-malware technology, new and secure online platforms and more projects focused on company-wide anti-fraud awareness.

Stage 3 – Committed

Your organisation is committed to developing a strong culture of fraud prevention and cybersecurity awareness. You have invested the needed resources into digital tools and software that help keep all of your business operations safe, while inspiring a company-wide anti-fraud culture change.

Stage 4 – Engaged

At this point, your organisation is fully committed to the company’s online security. There are training programmes for employees, secure online platforms, and dedicated teams of in-house (or contracted) cybersecurity experts focusing on fraud prevention. Every employee is on board and always prioritises fraud prevention in their work.

Stage 5 – Embedded

These are larger organisations, such as multinational corporations and government entities, that require dedicated cybersecurity teams and a robust network of anti-fraud processes, tools, software and techniques. Their size, importance and level of exposure means that they are at greater risk for more consequential financial, organisational, or personal online fraud.

Committing To a Culture of Counter Fraud

Any organisation, public or private, large, or small, needs to consider their level of exposure to various cybersecurity risks and determine if their current anti-fraud measures are sufficient. In the modern day – especially with the massive growth in online activity during the pandemic – it is more important than ever to commit to an organisational culture of fraud prevention and secure digital business operations.

At MarisIT, we are committed to protecting South Africans businesses and organisations from the growing threat of cyber fraud. We offer a range of products and services designed to mitigate cybersecurity risks and keep your online presence safe and secure. If you want to build a strong anti-fraud culture in your company, contact MarisIT today.

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