Fraud has been a threat to both individuals and businesses for a very long time. However, with the rise of the internet over the past few decades, people are being exposed to fraud from all over the world, and the increasing digitalisation of data has made it so that one slip could have potentially devastating impacts on both your business and your personal life. Because of this, it has become imperative for businesses to utilise adequate tools to do everything in their power to protect themselves from fraud. With that in mind, to help you out with this task, today we are going to take a look at a few useful tips on how to protect your business from fraud.
Understand the different types of fraud
The different types of fraud your business can face are usually differentiated based on who is trying to commit fraud against you. For example, insider fraud refers to someone within your business, most commonly your employees. Other types are customer fraud, contractor and vendor fraud. All these types of fraud will require different methods to deal with and prevent them, and researching them all in order to understand all your vulnerabilities should be the first step.
Know your customer (KYC)
One of the most important ways in which you should try to combat fraud is through the process of verifying your customers as well as associates. There are many KYC tests you can implement into your business practice such as validating emails and phone numbers through pin systems, asking a customer-specific question that only they will know, etc. To take this process a step further, you can even hire the help of a professional data company specialising in providing their customers with data-based validating systems in order to give them fast and valid KYC information. By implementing it into your business practice, you can always be assured that the clients or vendors you are dealing with are indeed legitimate and aren’t trying to trick you.
Protect your funds and secure your payments
The most common things people who are trying to defraud you want to achieve is to get money out of you and your business. Because of this, your efforts to protect against fraud should also focus on preventing this from happening and increasing your security when it comes to the way you deal with money. You should start by separating your business and personal bank accounts, if you haven’t already, as this will mean your entire livelihood won’t be at stake in the case someone does defraud you. You should also talk to your bank and see all of the different security measures they offer for things such as online banking. However, you should also take the necessary steps to secure the payment methods used by your business. This means taking extra precautions and making sure the checks you receive are indeed valid, but you should also carefully read the policies of payment processors and methods you’re using – PayPal, banks, credit card companies, etc.
Do employee background checks
While it’s sad to hear a lot of potential fraud you face may indeed come from your employees. This is why you should be extra careful when expanding your workforce by conducting thorough background checks instead of only relying on their references and work history. There are professional businesses that specialize in doing this and can help you make sure the background check is thorough and while this isn’t necessary and you most likely can do a decent background check on your own if you really want to be sure your potential employees are clear it should be something to consider.
While taking the necessary steps to protect your business against fraud is vital, you can never be too safe, which is why you should also look into purchasing insurance as a last line of defence, it’s always better to be safe than sorry. With that being said, it’s also important to remember that protecting against fraud is a process that constantly develops and needs to be attended to. So, just putting a few security options in place isn’t enough, you need to diligently update your defences and keep up with the latest trends.