While there’s hope that the new year will ring in a better worldwide economic climate, there’s also an increased expectation among supply chain and procurement professionals that incidents of fraud will increase over the next twelve months, most especially in Europe and the UK. Of particular concern is the potential for internal fraud, which many companies are susceptible to due to inadequate procurement and supply chain visibility. Procurement is especially vulnerable during periods of economic contraction because the people who are tasked with this function are under more pressure to commit fraudulent behavior.
“The current economic climate is driving change and there is an evolution in the world of fraud prevention that we have not seen before,” says Bill Trueman, CEO of UK Fraud. “However, if we are to stay ahead of the fraudster, we have to be able to read these trends and manage both our strategy and the risks accordingly.”
Worries such as these serve to underscore the need for preparation and vigilance, something best served through implementation of asset management software and other supply chain management solutions, which use tools such as RFID to track shipments, equipment and miscellaneous items that might come up missing on a consistent basis or could be potential targets for fraudulent behavior. Just as important, e-procurement software has the capability of monitoring spend, controlling purchases and limiting access to particular vendors, which severely limits the opportunity for internal fraud and simplifies the process of identifying red-flagged purchases.
Fraud prevention isn’t something that can be adequately handled around a conference room table or by sending out e-mail reminders. It requires actively monitoring what a company owns and purchases, where items are located at any given point, who is responsible for them and which individuals have entered and exited the chain of custody. Supply chain management and e-procurement software saves a lot of money for both public and private organizations because of this unmatched visibility. Where there’s smoke, there’s fire – supply chain management and e-procurement solutions set off an alarm immediately, not after a company is engulfed.
Beyond the concern over procurement and supply chain weaknesses, companies are also bracing for increased mortgage fraud, CNP card fraud and other types of cyber-crime. While the expectation is that the UK and Europe are likely to suffer an increase in fraud due to more severe economic straits, companies within the United States are just as susceptible and should heed the same warnings.