So, what should you be doing now to help mitigate the risk of fraud? Here are five pointers based on my experience.
Regularly assess the risks of fraud
Over a third (36%) of organisations that have taken our fraud survey only assess fraud risk on an ad hoc basis. And almost one in ten (8%) has never carried out a fraud risk assessment. The pandemic saw organisations having to change processes at speed and provide more remote access to critical systems. If you haven’t done so already, now’s the time to conduct a thorough fraud risk assessment. And to make sure it happens, be clear on who’s responsible for this.
Train staff to spot the signs of fraud
Less than a quarter (23%) of our survey respondents ensure that all members of staff attend an annual update on fraud. Most provide training on an ad hoc basis. Regular training is important as employees under greater stress are more likely to miss the signs of fraud. Tests like the one that caught out my colleague can prove highly effective to raise people’s awareness. It also helps to keep them up to date with the latest fraud trends and patterns.
Set out a clear policy on handling fraud
85 percent of respondents said they have a fraud policy. But just two-fifths (42 percent) said it covers what is meant by unacceptable behaviour and that potential disciplinary action might result from this behaviour. Having a clear policy and communicating it regularly can help dissuade people who may be rationalising fraud. It’s also important that employees know how to report fraud. 81 percent of respondents said that they have a policy on reporting fraud. But 30 percent of these aren’t convinced their staff are aware of it.
Support whistle blowers
In my experience, internal fraud most often comes to light through whistle blowers. But employees are less likely to come forward if they fear an adverse impact on their own positions. According to our survey, less than half (48 percent) of respondents set out the protections available to staff who report fraud in their formal reporting policy. More than one in ten (13 percent) have no formal protections in place.
Establish a clear fraud response plan
What do you do if suspected fraud is reported? Less than half (47 percent) or respondents said they have a documented fraud response plan they would follow in the event that a significant fraud was alleged. It’s important that, once a potential fraud is reported, everyone is clear on how to respond and who is responsible for what.
If you’d like to discuss any of the points raised in this blog post, please don’t hesitate to contact me.