4 Business cybersecurity threats you may be overlooking

Internal and external threats that can make your business vulnerable

Successful business owners understand that protecting their customer and company data is essential for maintaining healthy cash flow and fostering business growth. They know that business financial fraud incidents can significantly impact their sales, reputation, and cash flow.

A survey by the Association for Financial Professionals (AFP)¹ found that 65% of organizations were victims of payment fraud attacks or attempts in 2022; 44% of respondents said they didn't recoup any funds after a successful fraud attempt.

"Recognizing likely business financial fraud threats can help your company be ready to protect against them," says Mark Williams, Senior Vice President and Head of Business Banking Treasury Management at Citizens. "Some of the most common fraud threats are ones that people are not thinking about."

4 financial fraud threats facing businesses today

Businesses of all sizes face a number of internal and external risks to their financial information. Here are four situations that can make your company vulnerable.

1. A lack of insight.

When you don't have a way to consistently gather and analyze company financial data, your company may miss signs of business financial fraud. The most resilient companies recognize this and place a premium on cash management and the insight that goes with it. A recent Citizens' survey found that 51% of extremely resilient businesses say they have an effective means of gathering and analyzing company data. This compares with only 15% of less resilient businesses that report having an effective approach.

2. Accepting cash.

When customers pay your business with cash, you are facing the potential for business financial fraud. When your company accepts cash as payment, you may open your business up to people stealing funds, transferring funds inappropriately from company bank accounts, or otherwise misusing this vulnerable asset.

3. Not reviewing checks.

Paper checks include a significant amount of personally identifiable information that can be easily forged or stolen, making them a potentially risky form of payment. Financial Crimes Enforcement Network statistics² reveal that the number of check fraud reports filed by banks nearly doubled to 680,000 last year, compared to 350,000 in 2021. Check fraud can include anything from forging of signatures and endorsements to alteration of payee names or payment amount. One type of fraud, known as check washing, involves criminals stealing checks from a mailbox, opening them, and changing the amount and payee before cashing them. Businesses can help to mitigate fraud automatically by using Positive Pay to quickly verify checks and ensure that only authorized payments are made from their account.

"Companies accepting checks have options to build protection into each transaction," says Mark Williams. "With a high number of checks, an automated solution can work best to help ensure comprehensive coverage."

4. Employee mistakes.

While your employees may not mean any ill will toward your company, they can still present a potential significant business financial fraud risk. Phishing schemes and other email fraud scams can cause staff to expose your network or send funds to a criminal posing as a company executive. More than three-quarters of respondents to a survey from Mimecast³ said employee mistakes left their businesses vulnerable to fraudulent attacks. The most successful business leaders recognize this threat. According to the Citizens survey the most resilient companies are roughly twice as likely to be committed to protecting against business financial fraud involving employees than other companies.

Check out these business fraud resources or schedule time with a Citizens Business Banker to discuss ways you can protect against financial fraud.