Organizations lose about 5% of their annual revenues to fraud. Across industries, and within the financial sector in particular, companies are ramping up their efforts to integrate fraud risk assessments and management into their business practices.
There are a number of risk factors that increase an organization’s exposure to fraud risk. These factors include if the items that can be stolen are of high value in proportion to their size, if there is a ready market for the resale of stolen goods, or if there is a large amount of cash on premise, to name a few. With the advent of new technologies and the increase of sensitive information stored online, fraud risk factors will only continue to multiply, thereby further necessitating effective fraud prevention.
The goal of fraud risk management is, of course, to reduce the risk of fraud. To do so, organizations must develop a comprehensive anti-fraud program. Fraud risk management systems ensure organizations can identify their exposure, detect gaps in their procedures, recommend remediation measures, and respond quickly and effectively to incidents of fraud.