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Is no fraud possible?

Fraud, of all kinds, is the third biggest threat to business today (1st- climate change and 2nd- geopolitical threats) which can only be tackled by;

  1. accepting the basics of fraud:
    1. A major threat is your own staff, e.g.
      1. occupational fraud by staff is the single biggest source of fraud report ACFE members
      2. occupational fraud is worldwide 
      3. ACFE estimate that $3.7 tn/annum is lost to occupational fraud
    2. Staff indiscipline is the biggest weakness in many companies
    3. There are six basic sources of fraud according to the UK Metropolitan Police:
  •  
  • Source & Copyright©2014 - Metropolitan Policy UK

2. adopting basic best practices

3. using the most effective technologies.

Best practices

A recent blog from Treasury Intelligent Solutions, see,  stressed the importance of internal disciplines including:

  • monitor your liquidity in real-time, i.e. collect all account statements from every bank account worldwide automatically and assess liquidity positions in real time
  • review your electronic signing authorities
  • you are at risk with a high proportion of manual transactions
  • standardize and automate payment processes across all companies in the group  
  • companies need globally valid rules for their payment transactions with detailed guidelines on the following: how accounts are managed, who can open new accounts, who must give permission for this, and the documentation necessary to do so.

Effective technology

One of the most effective technologies to prevent fraud is to use machine learning platforms which are an important technology that businesses are turning to in their fight against financial crime. These systems are for banks, merchant acquirers and similar organisations, they represent the next generation of detection and mitigation, and they provide a way for businesses to harness one of their greatest assets—their customer data—and apply custom analytics that can evolve with the rapid pace of financial crime. 

An important report in March 2019 from Aite AIM Evaluation: Fraud and AML Machine Learning Platform Vendors by Julie Conroy.This report covered the main vendors of these systems and concluded that:

“Featurespace, Feedzai, and Simility all emerge as best in class. All three vendors are among the new generation of entrants to the market and score high marks for the completeness of their product offerings, model performance, and the firms’ responsiveness and support capabilities.”

Many large companies will not have the resources to adopt such solutions, but, at least, they should use organisations that make use of these technology platforms because these advanced platforms will deliver far less fraud.


CTMfile take: Minimising fraud is always a case of accepting the realities of fraud, employing best practices and using the most effective technology to protect yourself.

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This item appears in the following sections:
ID Systems & Services in Fraud Prevention
Minimizing Fraud Procedures
Minimizing Payment Fraud

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