When it comes to detecting and preventing fraud, most businesses will focus their efforts on external threats. However, a recent report revealed a significant increase in the share of economic crime committed by internal actors.
PwC’s Global Economic Crime and Fraud Survey found that employee fraud went up from 46% in 2016 to 52% in 2018. In fact, internal actors were a third more likely than external actors to be the perpetrators of the most disruptive frauds.
“More and more companies, organisations and nation states are now recognising that corruption and fraud are holding them back from competing on the global stage – and have simply become too costly to ignore,” said Didier Lavion, Principal, Global Economic Crime and Fraud Survey Leader, PwC US.
Thankfully, there are an increasing number of technological solutions coming to market that are making internal fraud more difficult for perpetrators, especially when it comes to payroll and accounting.
Holograms and watermarks
You might not think that checks featuring holograms and watermarks are very high-tech but, seeing as they can’t be digitally altered or tampered with, you can rest assured that counterfeiting isn’t an issue. Other high-security check features include tamper-resistant areas and controlled paper stock.
“If your check stock can be bought elsewhere, then your checks can be replicated, no matter how many security features they have,” says Frank Abagnale, Secure Document Consultant, Intuit QuickBooks. “By using unique check stock, you’re going a long way to prevent someone from duplicating your checks.”
An automated payroll system, which is capable of managing a range of business functions without human intervention, can minimise fraudulent activities significantly. One example is employee leave, as Director of PaySpace Bruce van Wyk explains:
“The self-service function enables employees to view their leave balance, submit a leave request or cancel one with manager and/or further approval. Any changes are immediately updated and accurately reflected on the payroll. This means that none of your employees will be able to take more leave than they are entitled to without your knowledge.”
Another advantage of modern payroll software is that everyone from executives and managers to administrators and employees can access relevant information at any time and on any device. Different access levels can be provided for different roles to ensure both confidentiality and security.
“Transparency also allows for an efficient audit trail functionality that can track various access points and see who is doing what at all times,” adds van Wyk. “This makes it far more difficult for employees to commit payroll fraud as there’s a greater chance that they’ll be found out.”
Tackling fraud with technology
Today, organisations have access to a wide range of innovative and sophisticated technologies with which to defend themselves against fraud. But because technology is often expensive to buy and difficult to implement, the decision about what to purchase and when can be a delicate one.
Ultimately, the ubiquity of technology creates two challenges for business – how to strike the right balance between a technology’s effectives and its cost while remaining one step ahead of fraudsters.