Cybersecurity Top Four: Emerging Fraud Trends for Business Leaders
Protect Your Business: Harness the Power of Fraudster Tech to Improve Cybersecurity
REDW’s trusted business and cybersecurity professionals are identifying fraud risk potential in emerging business trends which can become points of vulnerability—or strength—for a business of any size.
Is your team up to scratch on the basics of cybersecurity?
Don’t fall behind the times. As seen in the current spearphishing scam targeting tax professionals, cyber hackers are upping their game with specifically designed tricks, targeting all levels of employees.
Emerging Fraud Trends for Business Leaders
Accepting crypto as a payment method in your business may be an available option and may help accelerate payments, especially when working with ecommerce or international businesses. However, it can be difficult to hedge against the risks of fluctuations and accounting for crypto valuations at fair market value. Apps such as Gilded and Bitcoin Sync can help automate transactions denominated in crypto.
When it comes to tracing payment methods, Bitcoin, Ethereum and other digital currencies can be difficult or impossible to trace. This is because cryptocurrencies are created as digital tokens which are bought and sold through a decentralized system, which unlike traditional physical currencies, aren’t tied to or backed by any government or nation.
Despite these discernible risks, using, accepting, and investing in cryptocurrencies remains a growing interest. Bitcoin is now a decade old and is often cited as being accepted by major corporations such as Microsoft, PayPal, and Overstock. And due to cryptocurrency’s relatively recent development, fraudsters are instinctively seizing opportunities to prey on new users investing or doing business with it.
Seed-funding scams, Ponzi schemes (using new investor funds to pay earlier investors), and malware (code that can cripple computers or data) are similar to what we traditionally see. Other scams like rug pulling — where devious developers dump all the tokens into the market, making the currency worthless and the investments penniless — are more unique to crypto.
REDW Principal (Client Advisory & Accounting Services) Chris Henderson, CPA/CITP, recommends, “Ensure you work with reputable firms and educate yourself when in consideration of utilizing or investing in any cryptocurrency. The risk of locked accounts and lost tokens goes beyond the realm of fraud and so should be carefully understood and considered.”
The core technology behind cryptocurrency and many other digital processes is blockchain. It’s the moniker for a public digital ledger of records (blocks) that uses a sequential verification system which, in turn, provides unique anonymous digit identifiers to ensure that the records are only accessed by intended parties.
But blockchain usage goes well beyond cryptocurrencies. It has applications for use with legal contracts, medical records, and (in any industry) where authorizations and a series of transactions or records are needed. While reducing fraud risk, the technology can reduce errors and processing time by restricting record access to unauthorized users. Some evolving businesses are using blockchain for smart contracts—essentially, self-verifying and enforcing contracts—due to the sense of security they bring as the contracts cannot be manipulated or changed.
Blockchain technology also has immense implications in the ability to automate accounting, reconciliation, reporting and confirming balances and transactions with authorized third parties. Real-world implementations are common but not yet mainstream. Businesses should proceed with the expectation that blockchain will permit – or even require – most transaction-stage accounting duties to be automated.
Cyber risk is one of the newer facts of the business life. Ransomware victims do not tend to advertise their situations but many companies, large and small, have become victims. Ransomware attacks often begin with phishing or malware gaining access to your company’s system. Cyber-hackers create and use the access—which can also come in through a ‘trusted’ vendor (as they did with Target)—to obtain login credentials and perpetrate their attack. Resolving ransomware strikes requires swift action and engaging professional services to re-secure your devices and network, assess the extent of the damage, and potentially negotiate with the perpetrators.
REDW Cybersecurity Consultant Jennifer Moreno, explains, “Extensively vetting your vendors, fully-securing your network, creating redundant backups, and providing continual training to your team are all essential steps in helping to prevent ransomware attacks.”
Empower your organization’s battle against trending frauds in business and boost cybersecurity health with REDW’s Cybersecurity experts.
Using ransomware, nefarious criminals can add software code to your devices or network(s), encrypting your data and rendering your devices useless. Then, capitalizing on heightened emotional tensions at your business (which the fraud actors worked diligently to create) they will demand a ransom to unlock your data—often also threatening to delete or release the frozen data if demands are not met. More savvy fraudsters have expanded their threats to include releasing your decrypted data to the public or to competitors – a terrifying prospect. This double-edged sword can put you directly in harm’s way by crippling your operations and exposing your company to an expanded data breach.
Outsmarting Fraud Trends Tip: Multi-factor Authentication can significantly strengthen your cybersecurity defenses. Utilizing multi-factor authentication (MFA) whenever available for your business is also highly recommended by cybersecurity advisors. While it may take a moment longer for team members to get into their accounts, MFA systems can save companies countless headaches with their automated alerts which notify your IT team of a potential threat or cyber-hacker attempting to gain access to sensitive business data.
In addition to backing up your data, the trusted business and cybersecurity advisors at REDW cannot emphasize enough the importance of cybersecurity training for your staff.
Continually teaching your human team how to manually detect suspicious emails is critical to a well-developed security protocol.
Analyzing large volumes of data to reveal outliers, trends, and metrics has become commonplace in mid-sized and large businesses and may be a key growth opportunity for smaller businesses (particularly those who process hundreds or thousands of transactions daily). Data analytics is not just for large businesses anymore. Advanced, enterprise-level data analytics tools are available at a reasonable monthly fee with in-depth training provided at no cost – or available on YouTube. More robust than the minimal dashboards offered within your accounting information systems, the strengths of the best data analytic suites include marrying multiple data sources, pairing financial and statistical data, and providing live updates. The right tracking of the right metrics – both input and output measures – can be a competitive advantage to propel your business forward and increase positive possibilities.
“Actively collating the data and interpreting the findings allows companies to do more analysis with less human intervention,” says REDW Operations Manager Chris Framel, PMP. “These processes can become a vital business decision-making aid and can even result in business cost savings through the automation of manual work.”
Use data to outsmart fraud trends and drive better business decisions. Learn more about REDW’s Data & Business Intelligence services.
When it comes to protecting your business, the same data analytics skillset can be used to highlight fraud indicators and pursue data trails. Data scientists and analysts can arrange and link datasets to uncover patterns and anomalies. Key performance indicators (KPIs) drawn on for gauging a business’s economic health can be mirrored to create a set of key risk indicators (KRIs) to assess and highlight losses, deviations, and internal and external risks. Having an analyst who can then evaluate and interpret these red flags for your company is quickly becoming part of today’s best decision-making practices.
Do These Fraud Trends Reveal a Technological Curse or Blessing? Take a Proactive Approach
Used by the nefarious, digital tools and technologies morph at the hands of perpetrators as they constantly look for diverse ways to infiltrate our businesses. But business leaders can become proactive knowing that these same tools have the power and potential to transform our organizations for the better—and lead us to the fraudsters who are desperately trying to remain hidden.
For questions on elevating business practices for your organization, contact the trusted Client Advisory and Accounting (CAAS) professionals at REDW.