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When it comes to financial fraud, there is both good and bad news. The bad news is that financial fraud among both households and businesses is alarming and is a serious issue to be dealt with. The good news – however – is that, while the numbers are high, they are falling. In fact, in 2016, cases of financial fraud went down 5%, and banks and card companies have improved their technology to catch and prevent two-thirds of financial fraud attempts.
The threat of financial fraud is increasingly sophisticated and almost exclusively technological. To combat this threat, we need technological solutions every bit as sophisticated to retaliate.
So, how can this help?
The growth of artificial intelligence
Artificial intelligence may seem like something from a science fiction novel, but the use of AI in business is becoming more and more common. Especially in the operations and the distribution sector, AI technologies are programmed to automate systems. If this can be trained to spot key signs of fraud then it can act as the ‘eyes and ears’ of a company – flagging concerns and preventing or pausing transactions before they happen.
Human beings can’t keep a close eye on every single financial transaction, but automated technology allows them to monitor more of what’s going on.
Bitcoin and Blockchain
Cryptocurrency uses financial fraud to allow businesses to transfer funds around the world in real-time. One of the potential benefits here is security. With blockchain, all transactions are recorded in real-time – and records cannot be changed without the agreement of others. Put simply, it’s very hard to doctor information once it’s recorded and there’s a level of transparency around the way payments and transactions are made.
Biometrics
Passwords pose a vulnerability for many technological systems. While most workers might spend half their time trying to remember theirs, they present an opportunity for hackers to get into your software and get their hands on your data and your money.
Biometric technology is allowing for more secure ways of limiting access to systems. Thumbprints, eye scans, and even voice recognition should hopefully make life harder for fraudsters – and easier to detect people who are trying to access your systems when they shouldn’t.
But, use technology in moderation
Although you can lean on technology to help detect fraud, there’s always room for traditional processes too. You should use modern technology and foolproof traditional methods in tandem for maximum effect.
Things such as physical stamps and watermarked documents make it harder to forge documents and use these to defraud your business. As a business, you can customize your own self-inking stamp to add your own extra security step, for example. This can be very effective and it’s important not to move away from this sort of activity if it works.
Technology can help to detect business fraud. Automated systems, immutable records, and biometric system access are all important developments to do this. Businesses can use a combination of all of those in tandem with tried and tested offline techniques to do their bit to avoid becoming a victim of fraud.
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