FEATURE : LOGISTICS engage in identity theft and impersonation to facilitate fraudulent payments .
Additionally , the constant movement of goods and the inherent trust required during handovers make the industry vulnerable to cargo theft , often linked to internal activities .
Collusion between employees and external parties , and tampering with inventory records to facilitate theft , are just some examples of how internal actors can exploit vulnerabilities in the system for personal gain .
Preventing fraud
The good news is that internal fraud is not an insurmountable challenge . By proactively addressing vulnerabilities and implementing robust prevention measures , logistics companies can significantly mitigate their risk .
This requires a multifaceted approach that starts with strengthening internal controls through the segregation of duties . This sees various aspects of a financial transaction being handled by different individuals to prevent any single employee from having total control over a process , which reduces the risk of manipulation .
It is important to build a culture of integrity , centred on ethical conduct and open communication . This requires regular employee training on fraud prevention , highlighting the consequences of fraudulent activities , and promoting a safe environment for reporting suspicious activity .
Investing in the right technology is also key . The implementation of robust cybersecurity measures and data encryption solutions is necessary , along with regular penetration testing to safeguard against cyber threats and data breaches that can facilitate internal fraud .
Along with cybersecurity measures , it is necessary to prioritise regular monitoring through regular audits , both internal and external . This helps to detect anomalies and identify potential discrepancies .
Internal fraud poses a significant risk in logistics but specialised suppliers can play an invaluable role in helping companies by automating key checks and processes that would otherwise be vulnerable to manual , human error or manipulation .
Introducing the KYP platform
By using a Know Your Payee , KYP platform , logistics companies can more effectively mitigate the impact of
internal fraud , reducing financial losses stemming from fraudulent payments .
Offering a secure payment verification service , can help prevent fictitious invoicing by verifying beneficiary and bank account details before processing EFT payments . The system detects red flags , such as mismatches in account names and numbers , reducing errors and minimising manipulation opportunities .
For data-driven insights , specialised suppliers provides comprehensive fraud data , enabling logistics companies to identify risks and anomalies in payment processes . This approach facilitates proactive risk mitigation strategies based on high-risk accounts or additional verification steps for new suppliers .
With advanced fraud detection capabilities , real-time monitoring and anomaly detection uses advanced algorithms to identify unusual behaviour , potentially revealing internal fraud attempts .
Beyond fraud prevention , making use of such a service contributes to enhanced reputation management
Ryan Mer , CEO eftsure Africa
IT IS IMPORTANT TO BUILD
A CULTURE OF INTEGRITY , CENTRED ON ETHICAL CONDUCT AND OPEN
COMMUNICATION .
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