Digital transformation has had a profound impact on the financial sector, but while this rise in technology has brought with it a great number of positive elements, such as introducing new and quicker methods of digital payments, many will agree that it has also raised a number of security-related issues, too.

With new technology like deepfakes, AI (artificial intelligence) and speed bots, criminals such as fraudsters have wasted no time finding ways to create identities that are synthetic, or of bypassing traditional checks used to verify identities.

To help keep your business safe from fraud, here are 6 tips to help you detect it, and prevent it from happening in the first instance:

  1. Try and create a culture of accountability and transparency

All of your employees within your accounting department (or any other department) should feel as if they can safely and anonymously report any activity they believe to be suspicious. They should also be confident that their report will be taken seriously, and not just by the relevant personnel, but by senior management. 

2. Put a robust code of conduct in place

The accounting profession is heavily regulated as a financial institution, and as such, it’s imperative that your company creates and upholds a clear policy on what constitutes as fraudulent activity, and has appropriate punishments for those who breach any parts of that code. Try to involve your employees when creating a code of conduct, and make sure that all of your policies are kept up-to-date with any new technology.

3. Carry out effective investigative procedures internally

When fraudulent activity has been suspected or reported officially, an investigation to identify the source must be conducted promptly. How you go about doing so is up to you as an organization, but to help minimize loss and any damage to your reputation, you must ensure that the investigation is thorough.

4. Train employees in fraud detection

Just as technology may be used to commit acts of fraud, so can it be used to detect and prevent fraud from happening. Appropriate software can help you identify and pinpoint any suspicious activity, and training your employees how to use it gives you the best chance of protecting your data and company reputation.

5. Utilize data analytics

While data analytics can be used to great effect for marketing or comparing internal performance, when used correctly, it can also be a highly effective tool for combating fraud and preventing it from taking place within your accounting company. Combining visualisation and data analytics, trained team members can search through raw data in an effort to spot any unusual activity or patterns that might lead to the prevention and detection of fraud.

6. Get rid of any areas of weakness

Technology has made it easier for fraudsters to carry out fraudulent activity, while making it harder for it to be detected. This means that if you want to protect your accounting firm from fraud by being able to prevent and detect it, you must ensure that any potentially weak areas, such as cyber security measures and login procedures, are improved and robust, and by embracing technology, this can be achieved.

If you outsource any of your accounting requirements, take the time to check that the provider you’re using has security measures that match your own (using the above strategies as a benchmark), so that both parties are in the best position possible to detect fraud, and ultimately, prevent it.