Fraud? Surely not in my company – you may think. But the statistics tell us a different story. According to the 2022 ACFE Report to the Nations, an average organization loses 5% of its annual revenue just to fraud alone. Globally, that amounts to over 4.7 Trillion US dollars lost, and the numbers are rising every year as fraud continues to be a growing issue worldwide.
“Occupational fraud is likely the costliest and most common form of financial crime in the world. This is bigger than healthcare fraud, tax evasion, money laundering and identity theft.”
– Research Director Andi McNeal, CFE, CPA
Whether you are personally suspicious of fraudsters currently lurking within your own ranks or not, you are probably wondering what can you do right now to protect yourself and your company before it’s too late.
Uncovering Foul Play
According to the ACFE report, the second, third, and fourth most common methods of uncovering fraud, right after the most commonly cited personal tips, are the following: 16% of cases is uncovered through internal audits, 12% by management reviews, and another 6% by document examination.
Furthermore, the research found that 88% of fraud cases involved some kind of concealment method. That includes creating fraudulent physical or electronic documents, altering existing physical or electronic documents, and destroying or withholding evidence altogether.
From the data outlined above, it is apparent that aside from whistleblowing, fraud is mostly uncovered when going through relevant files, and in many cases, there will be forged or altered documents planted to fool those who aren’t paying enough attention.
This is where trusted, verifiable documents come into play. Adopting a digital signature solution is a simple yet effective way to both, make fraud harder to successfully carry out and conceal, and also easier to discover. How? Let’s look into it.
eSigning Against Fraud
Implementing a digital signature software within your organization is, of course, not going to magically save you from all threats of fraud. However, it can be a useful part of a wider anti-fraud measure framework, one that is easy to implement, not too costly, and doesn’t scream distrust and surveillance. Your employees are going to enjoy the added work and time saving benefits.
These are some of the main advantages digital transformation solutions offer against fraud.
1. Fraud prevention
Access Control
Implementing role-based access control ensures that only authorized individuals can create, sign, or view documents. This restricts access to sensitive information and reduces the chances of fraudulent activities.
Multi-factor Authentication
Using MFA before signing or opening a document ensures that only the intended person or people can sign documents, approve transactions, or even access already completed agreements.
Timestamp
Creates proof that the document existed or was signed at a certain time.
Central Document Repository
By keeping your documents in a centralized, transparent digital archive where you can see what each member of your organization is doing with them, it is way less possible for files to get mysteriously “lost”.
2. Uncovering fraud
Electronic Certificate
Electronic certificate is what “seals” the document, making it verifiable & trustworthy. Any document containing an electronic certificate can be easily verified with readily available tools such as Adobe Acrobat.
Even better, in case of personal or organization level certificates, the identity of the signatory (or company on behalf of which they are signing) is visible directly from the document.
Verification
Document verification shows whether the document has been modified in any way after being signed or not, easily detecting a fraudulently altered file.
Audit Trail
Digitally signed documents come with a detailed Audit Trail that tracks all document processing activities, including the identity of all participants, the date and time of signing, and any changes made since.
3. Mitigating fraud
Legal Admissibility
Trusted and verifiable eSignatures hold legal weight and can be used as evidence in legal proceedings against fraudsters.
In Conclusion
Fraud happens and it seems to be an unfortunate side effect of running any business. Combating it requires a wide range of measures, from careful hiring process, thorough employee training, and constant promotion of a healthy, positive working environment within the company, to implementing systems that can help prevent fraud, as well as uncover it and lessen its negative impact.
Nobody wants to feel like their employer sees them as little more than a potential thief. No employee enjoys being constantly monitored and never fully trusted. Keeping employees in check yet still happy can be an extremely difficult balancing task.
As described above, an eSigning Solution Software that uses trusted, verifiable, certificate-based digital signatures, can help with fraud prevention, discovery, and mitigation but ultimately, it is a tool that is going to benefit everyone within the company – the increased transparency and security is just one its the many perks.
If you would like to introduce document security and promote transparency and honesty within your company, try Circularo – an end-to-end digital transformation platform boasting all the benefits described in this article. Free for the first 30 days.
