Are AML (Anti Money Laundering) and CFT (Combating the Financing of Terrorism) a thing of the past decade?
March 29, 2018
KYC and KYB Managed Services
May 15, 2018

Audit your processes before it is too late; you might be over exposed.

Blink!!….still there? If the answer is no, well that is how usually Fraud works.

Fraud has to do with chances and weaknesses in controls to reflect the true state of something….there are a huge number and types of frauds, with unfortunately internal being the one that hits you the hardest, as it questions the trust you would have placed in your own people…..one of which may be willing to take things from you, despite (or because of) the trust you have put on them.

Fraud by definition can take as many ways as weaknesses as one can find, either in controls, oversight, processes, etc. A good Fraudster is likely to be someone you will not notice until after the fraudulent behaviour has fully taken place and there is very little that you can do; by then reporting becomes a statistical piece of bureaucracy instead of a tool to actually address a situation of potential fraud.

Preventing Fraud is generally something that requires a lot more work than say money laundering, where typologies or specific behaviour can be used to determine patterns. A good fraudster is looking for things you may consider on day-to-day basis, as “ok” or “appropriate”. When one looks at say traders that have gone rogue and left their investment banking employers over exposed, they had knowledge of how information was passed and controlled, having direct access to points of weakness and loopholes that would allow for information to be controlled (hidden, retained, undisclosed, etc.)

The sophistication to determine “weak points” that most people are not able to notice, are usually key to a Fraudster behaviour; it is such intelligence that opens the door to questions of “what if I wanted to do X…around this process”…would it go unnoticed?

In most cases, Fraudsters can be split between chancers and professionals; the first category, will simply take advantage of specific circumstances to access short/medium term gains, generally with limited consequences, should they be found out. Professionals on the other hand, are fully able to display the confidence to defend their actions, distract attention from themselves – at times engaging in “detecting wrongs”- and in the best of cases, with an easy to execute an action plan, that may leave little or no trace at all.

Considering how to deal with Fraud is always going to be a challenge, where the first thing we recommend, is understanding who you are doing business with (both internal and external stakeholders). Research is key to understanding your business position; control of processes, especially around information management, retention and security have also become key part of preventing fraud. Nevertheless, whilst in cases your research may be sound, the key to dealing with a Fraudster is conducting business in a way where you never stop asking hard questions, where challenging what you are told and asking for verifiable evidence is likely to get you in a better position. Having a bulletproof audit trail is also of utmost importance.

Follow your instincts and never, ever, be afraid to challenge and push; chancers are likely to desist when they become aware that you will push and are not afraid to tackle difficult points, however before you do that, you must know well who you are dealing with. QGEN can help you with that.

COOKIE NOTICE: This site uses cookies. By continuing to use the site, you agree to the use of cookies. More information about our Cookie Policy can be found by clicking on the "More Info" button on the right.