12 Ways to mitigate fraud risk and increase profitability

Do you have a company? Have you ever encountered a risk fraud? What are the ways have you implemented in order to mitigate fraud risk?

To be precise, when you encounter fraud, the next thing you encounter are losses. When you manage company fraud risk, you eventually increase profits margin. That is a sure thing. Organizations require several steps to combat fraud risk attacks. There are critical steps one needs to undertake to ensure your company is on the right track.

#Fostering a serene ethical working environment

To foster an ethical working environment is critical in every organization. Have an ethical starting from the corridors of the boardroom that trickles down slowly up to the bottom list of employees. When company senior management lead by example. That is, by establishing a culture based on integrity and ethics. Consequently, employees will embrace and follow them. For instance, the greedy classic corporate scandals in 2000 showed the need of having ethics in the business sector.

# Effective screening of recruits using industry best practices

Globally, 50% of all job seekers have great resumes to seek for employment. However, this can be a false and misleading notion as some job seekers are fraudsters. It is an essential and critical measure for an employer to have a thorough conduct background check of applicants. An employer needs to deeply screen their potential candidates and background verification properly. If you do not do thorough research, you may hire one who has come to embezzle your funds. 

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#Routine evaluation and update your fraud definition

As long as fraud is concerned. The efficient thing that you need to know is constant about is change. Fraud is all about dynamic and fluid. Practices, processes, and procedures based on the constant definition of fraud .That is diverse ineffective in the risk and management programs and, hence, contributes to an increment of loss and decreases your ROI.

A company that has recent experience with fraud unit performance will straight away define its fraud risks. Then, the company gangs itself up with the new version of fraud definition and measures to implement. Hence, it advance its norms of practice, processes, and procedures to reflect on their current trends directly.

#Implement evolving risk mitigation strategy with robust anti-fraud procedures 

 In fraud risk management strategies, always target the recent risk in the fraud chain. It is imperative and crucial for companies to understand their fraud risk and the potential risk impact of not taking any action to mitigate fraud risks.

Mitigation of the first risk doesn’t mean that you have solved all fraud risks. Ignoring and not paying attention makes one vulnerable to exposing the proprietary of company information, consumers PII, trade secrecy, and having a damaged brand.

#internal audit of robust controls and regularly testing in customer’s demographic, services and products accordance

The foundation of fraud is all about fluid. A higher percentage of internal controls, like fraud definition, must have adaptation and change based on business type, customer base, risk tolerance, regulation requirement, products, and services provided. Failure to have an implementation of robust controls internally and testing of the control provides room for dishonest workers to have control circumvention and loot millions of money.

As organisations have learned the hard way; getting the lost money in a casino where employees have lost them isn’t an easy task.

# Implementation of an effective anti-fraud technology

Well, with technology, it won’t save you all you’re anti-fraud problems. But it has the best strategic anti-fraud measures. At any given point of investment, computing resources and time commitment to install the technology. It’s imperative and crucial for all companies to intervene and vet the technology before they purchase it entirely. You will have to pay big dividends to get it right. Recently, an individual company invested heavily in anti-fraud technology. They had a return of 8:1 on their investment, with the current economy that is quite significant.

#Evaluation of business code of conduct thoroughly, procedures, processes, and personnel administering it

According to SOX requirements, ethics hotline installation has no absolved strings of the management interaction process. The utilisation of an internal house program or choosing a qualified vendor is the first step. Regularly, one needs to evaluate internal management and update the processes. The point of this move is to ensure all company’s internal systems are working correctly, and there is a showup of all employees for the resources. Regularly, ongoing investigations and completed ones should be reviewed to aid, ensuring that the exercise thorough, and impartial manner.

#Regular and relevant training of ethics/anti-fraud to all employees

Do you have employees? Have they undergone new anti-fraud/ ethics training? Well, each company must teach and highly train employees of ethics and anti-fraud. It’s a practical and best strategy when it comes to management. There is no better move than the providence of training annually on the current global trends on policies, procedures, and practices of companies that have undergone a fraud attack. Organisations ad companies that have little or zero anti-fraud attacks or management risk training are more on the dark side that those that have had several attacks whom they have had mitigation fraud losses.

#silos breakdown

Always have a mind that’s holistic about the current trends and frauds and ensuring there is clear transparency. When it comes to ‘independent business’ siloed work units have an autonomous act. The autonomous act tends to have uniform corporate compliance prevention and the best strategies for anti-fraud risks.

Conclusion

Risk management of anti-fraud is no one-time thing. It is a cycle that has different changes from time to time. A cycle because of many factors due to the business mitigation of anti-fraud risks. This leads to new risks popping globally on the radar screen. Therefore, these different ways are to help you to mitigate some of the fraud risk and improve the profit margin. There is a whole representation of what a company needs to have to mitigate fraud risks, as fraud is comprised of many factors. Fraud risks come from different angles.

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