The COVID-19 global pandemic has altered the way many businesses are operating for at least the near-term. Many companies have had to shut down or limit access to offices, encourage or mandate work from home, and cancel events and gatherings. Balancing the necessity of distancing employees with continuing vital business in a struggling economy is top of mind everywhere. Even the best business continuity plans didn’t contemplate the circumstances we now find ourselves in.

Unfortunately, one activity that impacts a huge number of businesses but is unlikely to slow during the pandemic is fraud attempts. According to the Association for Financial Professionals (AFP) 2020 Payments Fraud and Control Survey, during the past year, 81% of companies were targets of payments fraud with fraudsters utilizing everything from Business Email Compromise (BEC) to altered checks, wire transfers, corporate credit cards and employee theft. 

The good news, however, is that there are proactive steps businesses can take to mitigate fraud while also addressing business continuity. 

Don’t fail at email

The AFP survey notes that Business Email Compromise (BEC) impacts 75% of organizations overall and is now the most often-reported source of payments fraud attacks with 61% of organizations reporting BEC as the source of attacks. 

Uma Wilson is executive vice president and director of treasury management, card and bank product for UMB.

BEC is a form of fraud that targets employees through email to gain access to company finances and deceive individuals into making money transfers. An example of BEC is when attackers gain access to an executive’s email account and then monitor their behavior. The attackers will identify when the executive is traveling or most vulnerable and send a note requesting payment or for an associate to click on a link that is malware.

Preventing BEC takes a plan, safeguard tools and education for all. This means ensuring your employees have the proper training for fraud detection, which usually requires having regular education sessions with your team. Focus on creating an atmosphere where employees feel free to share any unusual behavior or emails openly. Helping employees feel empowered and educated is key to stopping BEC in its tracks. 

Toss the paper 

Checks continue to be the payment method most impacted by fraud activity with 74% of organizations being affected in 2019, according to the AFP survey. This was an increase from 2018 and the first increase in this type of fraud since 2010. 

If you’re still using checks regularly, there are several reasons to consider a shift to electronic payment methods, such as a commercial cards program, which can meet a variety of business spending needs. In addition to fraud mitigation, commercial cards can also help businesses:

• Increase cash flow

• Pay bills faster

• Retain cash and float payments for longer period

• Participate in reward programs and receive cash back and rebates

• Lower administrative costs by streamlining payments and reconciling employee purchases automatically

• Save costs in transaction fees—the median cost of processing a paper check is $3, double the cost of a purchasing card transaction

From a safety perspective, built-in protections such as EMV chips and payment controls allow administrators to closely monitor and regulate card spending, which creates a fraud risk management infrastructure that is significantly stronger than that of check security systems.

Business continuity in any environment

As we work to mitigate fraud and ensure business continuity during the pandemic and into the future, here are three key steps to consider:

• Streamline and digitize processes so that they work even when crisis strikes. When your team is spread out across home offices, being able to remotely access systems and approve payments from anywhere becomes vital. Secure remote and mobile access allows the right approvers to easily view, approve and reconcile payment information regardless of their physical work location. Automating your payables process also helps provide greater visibility of cash reserves for key stakeholders.

• Turn checks into electronic payments that can be made anywhere. Converting to ACH and virtual card payments and outsourcing your remaining check stack allows you to avoid the physical challenges of printing and mailing checks in-house, while saving money in the process.

• Enhance security and reduce risk globally. The importance of security cannot be overstated. The right partner can drastically reduce your risk by managing, authenticating, and storing sensitive vendor payment information on your behalf. That partner can also help you navigate the growing reliance on email and digital communications, exposure to potential BEC, and other increasingly common attempts to divert money from your business.

Partner for success

Fraud is a key consideration for all companies and is becoming more complicated, especially in today’s ever-evolving environment. But taking steps to stay ahead of the fraudsters by working closely with employees and engaging key partners can help businesses protect themselves.   

Uma Wilson is executive vice president and director of treasury management, card and bank product for UMB, which includes developing product strategy, road map, business plans and P&L management for the depository, digital, payments and card solutions. She joined UMB in 2006 and has more than 20 years of experience in the financial services industry.