Keeping your business safe from fraud
Starting and running a business means one thing- a lot of money has been put in to get the business to where it is today. One of the fastest ways to see the money go down the drain is through fraud. As a small business owner, you may think that avoiding fraudulent activities is not on your list of things to do but think again.
According to a 2020 report prepared by PWC on Global Economic Crime and Fraud, 48% of businesses had suffered from at least one kind of fraud in the last two years which is the second highest reported level of incidents in the past 20 years. The Association of Certified Fraud Examiners believe that businesses with less than 100 employees are most susceptible compared to their superior equivalents.
Fraud has become a cost of doing business, a crime of the millennium, which can affect anyone, anytime, anywhere and it respects no boundaries. (Hamilton & Gabriel, 2012)
Information security is an essential element in management that affects every stakeholder in your business. From investors to employees. Reducing the risk of fraudulent activities helps in making sure your businesses grow at the appropriate rate and also attracts foreign investors. Investors are more likely to invest in businesses who have taken adequate steps in ensuring their business is protected.
What next? There are some steps you can take to reduce the risk of fraud in your small business*.
Protect your working tools
Encrypt all your devices, this includes laptops, desktops and mobile devices. For an extra layer of security you can implement a two-factor authentication code. Examples of good authenticators are Google Authenticator and Authy. It is also important to use the latest Anti- virus to give protection against malware. Additionally, no information system should be allowed to run without a functional and up to date anti-virus software.
Verify new employees
As your business grows bigger, your labour force will increase and so it is important to verify new employees and ensure they are genuine. You can also keep financial duties separate, so no single person has control of all financial decisions.
Another tip is to put in a chapter on internal fraud in your employee code of conduct. This would allow your new employees know that you have a low tolerance when it comes to fraud and theft and the consequences that might come with it should such ever occur.
Implement Security Awareness Training and Programs
Educate yourself and all your employees(new and old) on recognising and escalating fraudulent activities that may occur to reduce the impact of an attack or loss of data. It is important to ensure your employees understand every risk possible and because there are various ways in which a business can encounter cyber security issues, these trainings can be set up once a year. Security Awareness Programs should focus on common user security concerns- such as password selection, appropriate use of computing resources, email and web browsing safety, social engineering and phishing attacks.
In an age where almost everything is set up online and we rely more on storing data on the cloud than ever before, it is important to ensure your business safety and arm yourself with everything possible to combat fraud risks.
*These steps are only guidelines you can take and may not fully eradicate fraud. Please consult a cyber security consultant if you think you are at risk of fraud.