This article was written by Kate Gottermeier MPA, CFE, Senior Consultant at The Bonadio Group
It’s no surprise in this era of impressive technological advancement that fraudsters are cooking up more creative and elaborate schemes to grab funds. Accountants and investigators need up to date knowledge, skills, and tools more than ever to effectively combat fraud. In the past, sifting through stacks of looseleaf bank statements, deposit slips, and receipts for manual entry into spreadsheets was the only way to follow the paper trail in financial crimes. This approach has become antiquated with the rise of data analysis software programs that tackle everything from physical documents to cryptocurrency transaction data. Use of technology means better prevention, faster detection, and improved remediation, but only if that technology is secure and accurate. Strategic partnerships in different areas of expertise will soon become the norm, as investigators will have to consult with a wide variety of experts outside their offices on cases of financial fraud. Two professions that will undoubtedly overlap in the fraud space as we shift from the Mid-Digital Age to a Post-Digital Age are forensic accounting and cyber security. FraudFindr and FoxPointe Solutions are doing just that.
FraudFindr- Cloud-Based Software
Built in 2020 by a forensic accountant, FraudFindr is a cloud-based software that leverages the power of optical character recognition (OCR) to digitalize financial institution transactions, identifies anomalies, and aggregates total monetary losses. The ability to upload pdfs, .csv, or even connect directly to a financial institution allows fraud investigators to analyze data, visualize spending patterns, and report on the findings of multiple bank accounts faster than traditional methods. FraudFindr auto-populates a sources and uses of cash report and pinpoints abnormalities across the various types of payment methods that the fraudster may have access to. This results in faster and more effective intervention, cutting off the financial blood supply to the fraudster.
Cyber Security Prevention & Identification
While tools like FraudFindr consider fraud within a dataset, cyber security experts focus on prevention and identification in all of the systems outside that dataset. FoxPointe sets businesses up for success by developing and implementing controls that protect against fraudsters, conducting penetration testing, offering IT risk management and compliance services, and performing IT audits. Individuals performing these services are known as “White Hats” in the cyber security world, and use their hacking ability for good and ethical means – aiding the fight against phishing scams, spoofing, social engineering hacks, and identity theft. This results in identifying weak spots, deploying remediation steps, and raising awareness about potential attacks as early as possible.
Typical Fraud Case Lasts 12 Months Before Detection
According to the Association of Certified Fraud Examiners’ (ACFE) 2022 Report to the Nations, a typical fraud case lasts 12 months before detection, with a median loss of $117,000. Losses like these can be catastrophic. Whether it be an organization with enormous amounts of highly sensitive and valuable customer data ripe for a cyber security attack, a small mom-and-pop shop where the bookkeeper has no oversight, or an isolated and vulnerable individual ready to fall for a romance scam, fraudsters look for gaps in security measures, absence of controls, and capitalize on opportunity. A multi-disciplinary approach to prevention and detection is the best defense.
As financial crimes get increasingly more sophisticated, the tools and safeguards needed to detect and prevent fraud must do the same. FraudFindr is proud to partner with FoxPointe Solutions in combating the war on fraud and cyber security threats to businesses and individuals alike.