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strategies for managing pay-

ments fraud.

And where companies do seek

to battle back, the tactics they

use often are aimed at historical

threats rather than evolving fraud

strategies. Asked which are the

most important tactics used by

their companies, 45 percent of

survey respondents cite audit-

ing (audit trails). That’s followed

by expanded use of electronic

payments (41 percent) and daily

reconciliations (35 percent).

All three are valuable tools, to be

sure. By contrast, consider that

only about one-third of survey re-

spondents (34 percent) say they

employ dedicated fraud detec-

tion and monitoring systems that

can proactively ferret out fraud

attempts. The CFO too often

appears to be checking the rear-

view mirror instead of scanning

the road ahead for trouble.

Many finance executives also ad-

mit that they need to be doing

more to support their boards

of directors in this area. Asked

where their boards most often

fail to receive critical information

and decision-support data from

the CFO, 43 percent list fraud

monitoring and mitigation—

more than any other area. Thir-

ty-seven percent also say their

organizations lack the tools or

technology to enable the board

to make good decisions on this

issue.

THE WAY FORWARD:

FRAUD DETECTION

Where to begin? Dedicated

fraud detection and monitoring

systems top that list of tactics

that the finance team should

substantially improve. Cited by

36 percent of survey respon-

dents, fraud detection and mon-

itoring handily outpaces other

tools and practices that include

limiting the use of paper pay-

ments (26 percent), automated

approval workflows (24 per-

cent), audit trails (22 percent)

and daily reconciliations (22

percent). (See Figure 2).

4

I

FIVE KEY CFO CHALLENGES FOR ADDRESSING PAYMENTS FRAUD

continued on page 6

FIGURE 2

Tactics for managing payments fraud that my finance team should substantially

improve

Multiple responses allowed

19%

21%

22%

22%

22%

24%

26%

36%

Dedicated fraud detection and monitoring

Limited use of paper payments

Automated approval workflows

Audit trails

User authentication process

Daily reconciliations

Signatory management process

Expanded use of electronic payments