Business Matters: Fighting fraud - technology, friend or foe?
John Jones, corporate and forensic partner at Beever and Struthers in Manchester, highlights the role of technology in carrying out and fighting fraud.
The publication of yet another survey highlighting the seemingly inexorable increase in fraudulent activity in the UK highlights a significant challenge facing all organisations. The increasing use of technology is leaving us more open to sophisticated, complex cybercrime as more business is transacted electronically. So what, if anything, can be done to counter this threat?
There's no doubt that the increasing use of technology in every aspect of business, commercial and personal life has led to new opportunities for criminal activity. Fraudsters have always taken advantage of weaknesses in controls. They are now using technology, not only to facilitate increasingly sophisticated ways of spotting and exploiting systems loopholes, but also as a means of perpetrating crimes faster than ever.
Cybercrime has opened up a whole new range of criminal activity such as unauthorised access, hacking, spamming, malicious code, money laundering, investment and financial frauds. At the same time, using the speed and global reach of computers and digital technology, fraud schemes such as theft of intellectual property and commercially sensitive information, industrial espionage and identity theft can now be carried out at a speed and on a scale previously unimaginable.
But, technology can also be used in the fight against fraud. Applying logical thought processes combined with data analysis techniques and specialist software allows the review and investigation of evidence in more depth and more efficiently. This goes well beyond testing underlying IT systems and controls. The fraud investigator's armoury now includes electronic data capture techniques to preserve evidence. Sophisticated data analytics tools can review large volumes of information, and data mining technology can be used to identify anomalies and suspicious patterns or transactions.
Of course, by the time a fraud is being investigated it is often too late. Fraud can seriously damage an organisation’s finances and reputation, so before relying on technology it's vital to ensure that basic anti-fraud tools are in place in terms of risk management, internal controls, governance and compliance procedures.
Contact Details
john.jones@beeverstruthers.co.uk
0161 832 4901
