Corporate fraud – is modern technology really to blame?
The adage that ‘a chain is only as strong as its weakest link’ was coined in the Eighteenth Century, well before modern business methods and technology were envisioned. Yet a recent presentation to the Kent Corporate Finance Alliance, organised by Kreston Reeves and hosted by Barclays Bank at their Kings Hill offices in West Malling, showed that cyber crime perpetrated on UK businesses has escalated to more than 2.1 million victims in the UK in 2015 (Office of National Statistics, 2016). And those figures under-report its incidence.
Businesses and business people are especially vulnerable to cyber crime said Lewis Hunt, a Barclays Digital Eagle, who showed the audience of accountants, bankers and lawyers the extent of the problem – and the ease with which technology can be used to search for, find and dupe business people.
For example, increasing levels of invoice fraud, where an organisation is tricked into changing bank account payee details for a sizeable payment by criminals posing as regular suppliers, means that more than 78% of invoice fraud is conducted via conventional email.
Modern business can be fast-moving and hectic – and increasingly done on the move – as Andrew Griggs from Kreston Reeves, representing the KCFA, pointed out. So we are all vulnerable to communications which look or feel authentic at first sight. The trick is to ensure that there are other systems, processes or pairs of eyes who can also exercise much-needed scrutiny.
And it’s not just financial fraud one has to worry about. Denial of Service attacks damage both revenues and hard-won reputations – and erode company value.
The irony in all this is that cyber crime, as Lewis Hunt observed, allows high volumes of electronic messaging – yet it’s still only the human element which makes mistakes.
Perhaps a further irony is that it was Thomas Reid’s ‘Essays on the Intellectual Powers of Man’, back in 1786, that concluded that man is, indeed, the weakest link in the chain.
If you’d like more guidance of ways to safeguard your business from fraud or cyber crime, please contact Tom Wacher here, or to register your interest in attending cyber crime seminars we will be running later this year, email firstname.lastname@example.org.
If you are active in the Kent Corporate Finance arena and would like to become a member of the Alliance and attend one of its upcoming meetings, please contact Carole Handley at Kreston Reeves on 0330 124 1399.
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