Unfortunately, you can never fully prevent business fraud. Fraud is a criminal activity, and so long as there are opportunities for it to be carried out, it will continue. You can, however, reduce the risk of certain types of fraud taking place, with a combination of comprehensive insurance cover and a few practical steps.

We’ve broken down the six core components of fraud defence into an actionable framework, called COMBAT. Here’s how you can implement it into your business to improve your fraud resilience.

Having a seamless reporting and back-and-forth communication policy within your business is key to raising awareness of fraud attempts. Employees should feel empowered and encouraged to bring forward any behaviour they’re unsure of, or flag fraud attempts as they see them happen – both internal and external.

Businesses thrive on measurement and reporting. Whether it’s revenue, website traffic, or customer satisfaction, having clear visibility over what’s happening at any one time can enable swift decision-making across various sectors.

Unfortunately, fraud observation and reporting are sometimes overlooked. This means that attempts are recognised, but not logged, leaving little room for analysis.

Senior figures within an organisation carry a lot of influence. They guide the direction of the company, set objectives, and ultimately inspire others to do their jobs more effectively.

With so much influence, there’s a strong need for managers to lead by example, helping establish and encourage anti-fraud practices throughout the team.

Understanding who you’re dealing with and knowing your customer’s history is an essential part of conducting safe, effective business dealings. Thus, you should make it a priority to understand who your customers are.

Before working with a new customer, verify their legitimacy by checking email addresses, company domains, premises, online presence, and social media. Remember to protect your funds by avoiding deposits until you’ve confirmed details like registration, addresses, VAT, bank info, trade references, and financial statements. Additionally, contact accountants or auditors if anything seems suspicious. These checks, and using helpful tools like this site, can help safeguard your business from potential fraud.
 

No matter how robust your mitigation protocols and strategies are, every single business is at risk of being defrauded. That said, some can be at higher risk than others, especially those who fail to query their own effectiveness at dealing with fraud attempts.

These risks come from many areas, like a gap in insurance policy, or a lack of training. Therefore, all businesses should regularly test and assess their team’s responses to fraud by conducting fraud risk assessment tests.

Training your workforce to not only spot fraud attempts, but also report them effectively, is perhaps the number one most effective method of improving your business’s fraud resilience. Without this, employees may be at greater risk of falling victim to deceptive tactics.

Make fraud a part of your training regime, regardless of where an employee sits in their tenure. For bonus points, use the insights from prior steps in the COMBAT framework (such as past fraud attempts and what steps were taken to rectify them) to inform your training.

Fraud is a major problem for businesses of all sizes. But by following these tips, you can dramatically reduce your chances of falling prey to criminals. Ensure your business is equipped against fraud with Allianz Trade’s Business Fraud Insurance. We provide protection for any losses seen as a direct result of fraud.

Contact us for a free, no-obligation consultation on how business fraud insurance can help you.