Previously on Game of Fraud we introduced the role of the CFO in adapting their defenses to face new and more aggressive forms of fraud and fraudsters who are better organized and more technically proficient than ever. And we answered the first of three questions that CFOs should be asking themselves about what exactly are the threats and what risks they represent, and what are the best human, organizational, and technological practices implement to mitigate, even prevent, fraud?
The season got really exciting In Episode 3 when we answered the next two questions CFOs should ask themselves: Why invest in fraud prevention and what are the most effective technology tools to mitigate, even prevent fraud?
We wrap up this series with our season finale: The CFO takes on seven key responsibilities and leads the fight against fraud.
- Make risk management a priority
Companies worldwide lost more than $7 billion due to fraud!1 However, despite these alarming figures, a report by PricewaterhousCooper confirms that only half of the companies surveyed say that they carried out a global risk evaluation regarding fraud over the past two years.2 That figure is still far too low given the many downsides of falling victim to fraud.
- Automate your processes
Opportunities for fraud may arise from vulnerabilities in processes. Finance and accounting leaders who have adopted automation see an opportunity to enable their team to focus their effort on statistical analysis, risk prevention, and strategic consulting rather than time-consuming and repetitive tasks that are sources for errors.
- Collaborate with IT
In today’s context of digital transformation, and facing increasing security vulnerabilities, sensitive data may be at risk including client files, bank account details, patents, and
more. CFOs and CIOs must therefore learn how to work together. While the CFO remains the protector of cost-related factors, the CIO’s role is essential for helping finance
departments manage data and technology tools.
- Acquire new skills and hire the right talent
CFOs should keep their knowledge about types of fraud and fraud prevention up-to-date, particularly when it comes to state and federal regulations, and work with experts to master the data science to improve data analysis and reporting. The CFO should also acquire talent with technical-operational profiles able to master software robots. This includes data scientists, business analysts, and more.
- Engage all internal stakeholders
When handling issues related to fraud, the human factor is often the primary source of risk. Training employees, raising awareness, and having a well-rehearsed, thorough crisis communications plan in place must all be among the CFO’s top priorities.
- Implement a cloud-based automation solution
One security measure found with the Cloud: Only managers assigned a login can access sensitive documents, and the system is very difficult to hack. Another: Approving managers can see where the document is in the approval process and a history of who has accessed the document, allowing an additional check and balance.
- Embrace tools that leverage advanced and emerging technologies
Today’s cloud-based invoice processing (AP) automation solutions leverage advanced technologies such as OCR (optical character recognition), smart data extraction, and machine learning, all powered by AI for built-in checks and balances and fraud detection. These systems can identify fake invoices from “real” vendors. In a complete purchase-to-pay (P2P) workflow approval process, the purchase order is imported from the ERP and matches the P.O. to the invoice. The fake invoice will not have a P.O. to match against, alerting the user.
1 ACFE 2018 Report to the Nations Global Study on Fraud and Abuse
2 PwC Global Economic Crime and Fraud Survey 2018
3 PwC, 2019 Priorities for Chief Financial Officers