Fraud prevention as a cornerstone of operational risk management

By Kyriba October 29, 2015

Imagine this: you come out of your regularly scheduled Monday morning meeting and see that you have a missed call. You listen to your message and it’s your CFO requesting you to send a wire to a specific bank account in the Far East for a specific vendor with all of the correct details. You think it’s strange that this didn’t get emailed, or wasn’t communicated to you from someone else. This hasn’t happened before. On the other hand however, that sure sounded like the CFO, and you wouldn’t want to make them wait. Right? What do you do?

It turns out, that wasn’t the CFO that made that call even though it was their voice requesting the payment. That payment, should you have gone through the bank portal, initiated and released the wire, would now be sitting in some fraudsters bank account. This is a very real scenario and growing use of ‘vishing’ to commit payment fraud.

Those looking to defraud businesses have gotten much more sophisticated and have learned new techniques to commit wire fraud. As an example here, fraud networks are now leveraging online corporate recordings, such as earning calls, to record and then manipulate corporate executive voices.

Fraud will always be something that corporations will need to combat, and should be at the forefront of your operational control strategy. Leveraging a fully-integrated treasury management system (TMS) is a critical component, and foundation to your prevention of payment fraud. While a TMS might allow you to put approval processes in place for your payments, how do those payments get communicated to a bank? Is it through another third-party provider, or a manual or scripted process?

Understanding what occurs with those payment messages, even after they have been approved, and how they are communicated to your banking partners from the TMS is a critical thing to consider in your evaluation of your operational risk. Your TMS should be able to support you at all stages of the process to minimize the potential exposure to fraudulent transactions.

With Kyriba’s fully-integrated treasury offering our clients can centralize, visualize, control and connect through our single platform to reduce their risk of payment fraud:

  • Centralize: Managing the initiation of various types of payments across multiple banking platforms, regions, gives our clients employees a single point of access as opposed to managing multiple logins across different portals.
  • Visualize: Initiated payments are immediately apart of the company’s overall cash position allowing them to see account deficiencies or funding needs. Additionally notifications are circulated and dashboards are automatically updated showing the details of the outstanding payments.
  • Control: All approvals and notifications are executed through a single portal giving treasury teams the ability to put a multi-tier approval process in place across multiple types of payments and multiple payment banks.
  • Connect: Kyriba’s centrally managed connectivity hub, the application will automatically create the proper payment messages for all fully approved payments and securely communicate them to their respective banks through a number of different connectivity protocols. With a growing library of over 700 different formats and sub-formats used for payments today, it is Kyriba’s technology team keeping up with the changing standards allowing our clients to eliminate the reliance on their internal IT teams.

Further Reading

eBook: Six Ways to Prevent Financial Fraud with Kyriba
eBook: The Business Case for a Payment Hub
Combating the ever-growing threat of payments fraud
Six common sense solutions for stopping payments fraud
Taming the (Dyre) Wolf and other fraudsters
How can your organization avoid getting spear phished?

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