E-commerce losses due to online payment fraud were estimated at $41 billion last year, demonstrating how important it is for businesses to have robust fraud prevention systems in place.
According to new research[1] According to Amex, UK businesses spend an average of 7% of their annual sales on fraud prevention.
In addition to significant hard costs, payment fraud can take up valuable time from employees tasked with responding to incidents and can lead to a poor customer experience.
Common cases that CFOs see include check fraud, credit card fraud, access fraud, and “spear phishing.” Proactively recognizing these risks can make your financial processes more robust.
“This is clearly an issue that CFOs are fully committed to,” says Stacey Sterbenz, general manager of UK commercial at American Express.
“Digitalization allows businesses to protect themselves from a wide range of fraud, so it is more important than ever for businesses to modernize and update their payment systems.”
Choosing the right partner
There is no silver bullet for finance executives fighting fraud. Making payments digitally instead of relying on manual methods is often one of the first steps for B2B companies to provide some protection from the threat of fraud, but many companies are falling behind in this regard. Masu.
Working with an experienced payment partner who can implement advanced digital security features such as encryption and multi-factor authentication will be fundamental to any response.
However, one of the biggest challenges CFOs face in combating payment fraud is finding and implementing the right technology. CFOs need to work with payment partners who can create “tailor-made solutions based on business needs,” says Sterbenz.
Starbenz said the solution provides a “comprehensive view” of a company’s spending patterns and activities to help finance teams identify potential risk factors or sudden changes that could indicate fraud. points out that there is a need.
One approach is to centralize payment activities into a single system. Combined with multiple standardized electronic authorizations, an integrated payment system enables a complete and detailed e-paper trail of all payments, minimizing opportunities for fraud.
Standardizing payment instructions is an important strategy for CFOs, not only in the area of investment transactions, but also in more familiar areas such as accounts payable and receivable. By incorporating standardized payment instructions into corporate finance systems, companies can streamline the payment process, whether it’s paying suppliers, invoicing customers, or other financial transactions. This standardization not only improves operational efficiency, but also serves as a protection against the redirection of funds to unauthorized accounts.
“In addition to this, CFOs must ensure that all payment systems, software and applications are up to date with the latest security updates to limit the risk of fraud attacks,” Sterbenz said. states.
Amex research found that for 60% of senior finance professionals, security tops the list of most important considerations when it comes to B2B payment methods.
Businesses should review their payment fraud detection and monitoring systems and protocols to ensure they are working. While some companies may have the resources to do this in-house, many companies find it makes sense to hire third-party experts to both create and regularly test their defense systems. You’d think that’s a good thing.
ahead of the curve
Throughout history, scammers have shown incredible dedication to outwit their victims. Also, with the advent of new technologies such as social media, mobile shopping, and mobile banking, the opportunities have simply expanded.
For example, while check fraud remains arguably the most common type of payment fraud, today’s criminals are increasingly exploiting digital technologies that make it faster and easier for businesses and consumers to interact with each other.
Sterbenz points out that CFOs shouldn’t be forced to choose between great customer experience and robust security. We need to figure out how to achieve both at the same time.
“One of the first steps in tackling payment fraud is to create an incident response plan,” they add. “A well-planned plan allows internal personnel to efficiently respond to fraud, minimize business impact, and quickly resume business as usual.”
One of the cornerstones of your response plan is to work closely with your payment provider so that they can continually evaluate and update their technology as it evolves to combat fraud.
“Fraudsters are becoming increasingly sophisticated and learning new tactics, so CFOs need to stay abreast of their strategies,” Sterbenz points out.
From secure and efficient virtual payments to simple reconciliation processes and more, American Express® Corporate Solutions keep your business running. Learn more about how our payment solutions can help.
American Express Services Europe Limited’s registered office is at Belgrave House, 76 Buckingham Palace Road, London, SW1W 9AX, UK. We are registered in England and Wales under company number 1833139 and are authorized and regulated by the Financial Conduct Authority.
[1] American Express and Opinium surveyed 750 respondents across the UK, including senior decision makers, senior finance professionals and payments finance team members from small to medium sized businesses and large businesses. The field survey was conducted from May 15th to May 23rd, 2023.
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