Importance of Risk Management and Anti-Fraud Technology
Fremont, CA: Fraud is a reality and has become increasingly crucial in an organization’s strategic discussion. Unfortunately, organizations are not dealing with fraud the way they should, either because they do not occur frequently or because the organizations fail in managing it properly. The advances made in technology have enabled companies, private and public, to defend their assets, their data, and their process. But it is the same technology that provides a mechanism for people who are prepared to steal or reap instant payoffs. In the past few years, companies have witnessed a large number of attacks with the sole purpose of committing computer fraud and profiting from the stolen information.
Although many companies were not the victim of this incident, the truth is that they were real, and many systems, as well as data, were compromised. According to the Global Fraud & Risk Report, 2016-2017 evidenced a considerable increase in the exposure of the interviewee companies. 82 percent of the executives interviewed stated at least one fraud incident in their organizations, resulting in significant growth of 75 percent concerning the previous survey. Despite the difficulty in pinpointing the amount of impact, it can be concluded that it is substantial for company revenues.
Moving on to the subject of technology, companies acknowledge that technology-driven fraud is on the rise, and they make strides to implement solutions that serve to mitigate or stem this crime. Nevertheless, these solutions, whether off-the-shelf or in-house developed, may not suffice against the risks organizations are exposed to given that they are deployed solely to solve something specific or to plug a security breach that has already been exploited. Several solutions available on the market are not predictive and do not produce new or unknown information and, even though the industry is working with Deep Learning and Machine Learning more, these attacks are growing exponentially.
Before choosing a specific solution, organizations have to conduct a fraud risk analysis that is not only deeper but also offers a broader vision. Fraud risk management has to be considered as a function meant to mitigate or eliminate exposure to such a risk.
Fraud risk management is a process that has to be developed at all levels of the organization. It is essential for policies, rules, and procedures to be established and implemented and to ensure that the processes and technology that are going to be used correspond to the realities of the business.