While 90% of Australian businesses were targeted by cyber fraud in 2017, as many as 72% of SMEs do not believe cyber fraud is a considerable risk to their business (MGI Fraud Review 2017).
This is an alarming statistic which highlights how underprepared Australian small and medium businesses are to deal with a business fraud attack.
So why is there such a disparity?
Perhaps smaller businesses believe that they will fly under the radar of fraudsters who will be drawn to larger, more lucrative organisations.
But that’s not actually the case. Reserve Bank’s Cyber Security Chief Andrew Pade has said that fraudsters are now turning their attention to ‘easier prey’ at the smaller end of town.
Cyber fraud is of course not the only form of business fraud that you need to be on the lookout for.
Fraud currently costs Australian businesses hundreds of thousands of dollars each year, and this is just the instances that have been accounted for.
Fraud can occur in any organisation, no matter what size, industry or sector.
So what is your best form of protection against the growing threat of business fraud?
We recommend every business undertakes a few vital steps:
1) Stay abreast of actual business fraud cases
The best way to know where the threat lies is to learn from other organisation’s misfortunes. Did you know that 36% of frauds in Australia last year were carried out by an organisation’s own management? Clearly having strong internal controls is critical in your bid to reduce the risk of undetected fraud occurring in your business.
MGI produces an annual fraud report which highlights recent cases of business fraud. Click here to access our report on business fraud.
2) Audit your fraud risk and implement strategies to reduce the chance of undetected fraud
The good news is that there are a number of strategies to reduce the risk of fraud occurring and going undetected in your business. Some strategies include having the proper internal controls in place, ensuring segregation of duties and spot checks and strengthening IT security.
MGI’s report on business fraud provides a number of recommended actions to prevent fraud from occurring in your workplace.
3) Have a disaster recovery plan
Particularly when it comes to cyber security you need to have a back-up plan to minimise the impact if you do end up the victim of a business fraud attack. Read more about this in our fraud report.
Some of Australia’s largest organisations are now facing fraud attacks as frequently as every four seconds (Sydney Morning Herald). While the threat to SMEs is not at this level, the threat is still very real. MGI’s audit division works with clients to help them stay abreast of current fraud threats and implement controls and safeguards to reduce the risk and impact of fraud.