For many organisations, the importance of investing in fraud prevention and detection may not be truly known until faced with a crisis. Often, businesses only appreciate the importance of these measures after facing fraud and experiencing the financial impact, emotional toll, and strain across the organisation. However, a proactive approach to fraud prevention is critical to safeguard business assets.

When we help clients impacted by fraud, we see first-hand the difficulties they face. These matters often require external intervention, including legal and regulatory involvement, to investigate, remediate, and recover losses. Such situations reinforce the value of prevention as a strategy that mitigates the impact of fraud before it happens. 

At RSM we help organisations adopt tools for fraud prevention and detection. The 2024 Anti-Fraud Technology Benchmarking Report by the Association of Certified Fraud Examiners (ACFE) offers valuable insights into how technology is transforming fraud prevention.

The report also highlights high-risk areas commonly monitored for fraud, such as payments, procurement, and disbursements. Focusing on these areas with data analytics can yield significant fraud detection benefits, and RSM helps clients technology-led techniques/analysis to address their specific vulnerabilities.

Practical applications of data monitoring

We implement practical data monitoring strategies that align with our clients’ operations:

Off-hour transactions:

• Anomaly Detection: AI can flag irregular transaction timings, such as significant payments processed late at night, which may signal fraud.
• Pattern Recognition: if certain employees regularly conduct off-hour transactions, data monitoring can trigger investigations to verify legitimacy.
   

New suppliers:

• Supplier Verification: machine learning cross-references new suppliers against public databases, flagging discrepancies for further review.
• Historical Analysis: analytics detect unusual transaction volumes or spikes with new suppliers, helping clients pre-empt potential fraud.
   

Disbursements:

• Segregation of Duties: analytics help enforce internal controls, ensuring that different employees handle disbursement authorisation and processing.
• Trend Analysis: data monitoring can highlight suspicious patterns, like sudden increases in small disbursements, which might indicate fraud.

Addressing implementation challenges with a strategic approach

Implementing anti-fraud technology comes with challenges. The ACFE report identifies budget constraints, data quality issues, and staffing as common obstacles. However, it also indicates that 60% of organisations plan to increase anti-fraud technology budgets, recognising the necessity of these investments. Generative AI is expected to play an important role, with most organisations planning to incorporate it within the next two years to improve anomaly detection and reduce resource demands.

We help clients overcome these barriers by ensuring that fraud prevention technology investments are well-targeted. Our approach involves aligning tools with client-specific needs and guiding organisations through the complexities of technology integration.

Recommendations for adopting technology

We advise organisations to adopt a strategic approach when implementing technology for fraud prevention and detection, including:

• Cost-benefit analysis: the cost of fraud often outweighs the expense of preventive measures, especially when considering the costs of investigation, recovery, regulatory engagement, and reputational damage. We guide clients in evaluating the financial impact of technology investment to prevent costly incidents.
• Risk assessment: focusing on high-risk areas helps clients allocate resources where they will be most effective. We assist in identifying vulnerabilities and optimising fraud prevention investments.
• Seamless integration: we ensure that new technologies complement existing systems, minimising operational disruption and maximising effectiveness.
• Training and upskilling: effective fraud prevention requires skilled personnel. We support clients in training their teams to manage new technologies proficiently.
• Continuous adaptation: fraud tactics evolve, and so must the tools to combat them. We work with clients on budgeting for ongoing updates, ensuring their defences remain robust over time.

A proactive path forward

We recommend that organisations adopt a proactive approach to fraud prevention, in order to anticipate and prepare for potential threats. Our Forensic and Investigation Services team provides clients with the guidance needed to implement advanced anti-fraud technologies and foster a culture of resilience.

For more information on our forensic and investigation services, please contact Declan Walsh, Partner of Forensic and Investigation Services, or Ari Senders, Partner of Forensic Technology. Together, we can help businesses build strong defences against fraud in a dynamic risk landscape.