Corporate financial fraud – how can treasury prevent it?

By Kyriba March 28, 2014

The range of risks to which companies are subjected has increased exponentially, with the advent of complex global supply chains and greater levels of foreign currency exposure. While many of the risk factors involved in trade today are not malicious in their background, one other area that has increased in tandem with global trade is financial fraud.  There are several different forms that financial fraud can take, from payments, to sales, expense, embezzlement and financial data theft. Any one of these can have a devastating impact on the organization, with financial impacts running into billions of dollars and major drops in share value.

A sample roll-call of recent  events makes for some pretty chilling reading for any corporate finance professional. In 2013 alone:

  • Banking giant J.P. Morgan made a $6.2 billion trading loss. Two traders were charged with fraud after their attempt to hide the loss.
  • Retailer Target had 110 million credit and debit card numbers stolen after a third party vendor’s login credentials are compromised. Its profits for the quarter fell by 46 percent – $440 million.
  • French engineering group Schneider Electric reported a €27 million loss due to internal fraud by a senior staff member, who sidestepped internal processes and controls to create fake sales discount documents.  

Corporate financial fraud is so prevalent that CNBC’s tracker of news on the topic runs to more a dozen pieces per week1.

So what can you do to protect your company? While there is no single magic bullet to prevent fraud, organizations need to implement both human and technology processes to minimize the risk. Finance and IT teams need to implement a range of application and data security measures, as well as increasing controls over bank accounts (especially in new markets), and, critically, corporate payments.

Kyriba helps a wide range of its clients to deliver solutions that can both minimize the likelihood of corporate fraud occurrences, as well as helping treasury teams identify potential fraud more quickly, thereby reducing losses.      

In order to give organizations an insight into how treasury technology and improved processes can help reduce corporate fraud, we will be hosting a webinar, in conjunction with Deloitte. The webinar will take place on Thursday, April 10, 2014 at 11 am ET (8am PT / 4pm UK) and will focus on areas such as:

  • Leveraging the cloud to increase data security
  • Improving validation and authentication of payments
  • Centralizing control of bank accounts, even when finance is decentralized
  • Implementing full separation of duties across all treasury workflows 

AFP members can obtain 1.2 CTP/CCM credits for attending and all attendees will be sent a copy of Kyriba’s white paper, Leveraging Treasury Technology in the War Against Fraud.


1CNBC fraud news tracker

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