Collaboration Lowers Risk of B2B Payments Fraud

Collaboration Lowers Risk of B2B Payments Fraud

The transition of employees to working from home has made critical business systems and processes more vulnerable to attack, resulting in an increase of B2B payments fraud.

Mitigating payments fraud risks requires a new level of collaboration between finance and information technology (IT) security teams to refresh security best practices and policies and provide integrated cybersecurity solutions that help organizations insulate payment processes from attack and identify potential vulnerabilities.

Currently, 38% of chief financial officers (CFOs) are responsible for IT departments, but many finance departments operate separately from their IT counterparts, as reported in the “FinTech Risk Management Playbook,” a PYMNTS and nsKnox collaboration.

Get the report: FinTech Risk Management Playbook

This data indicates a potential disconnect between enterprise finance and IT departments — a potential weakness for cybercriminals to exploit.

Both departments must work together to secure company infrastructure and back-office operations, including the interfaces between the front- and back-office workflows and employee devices. Employee education about best practices for stemming cyberattacks also is a critical defense.

B2B Payments Fraud Is Increasing

Before the health crisis, many companies strongly preferred their finance departments work on-premises, in large part due to security concerns. The remote workforce trend has made business systems and processes more vulnerable.

“Fraud was a frequent occurrence before the pandemic and is a more frequent occurrence now,” nsKnox Chief Operating Officer Nithai Barzam told PYMNTS in an interview.

Read more: Remote Finance Teams Expose B2B Payments Fraud Vulnerabilities

Remote work also led to an increase in business email compromise (BEC) scams, in which criminals send an email message that appears to come from a known source making a legitimate request.

The shift to electronic methods for check printing and approvals also has contributed to the growth in fraud.

And using stolen credentials most likely gathered through phishing, fraudsters now can breach corporate networks and access internal databases by impersonating employees through their home networks.

Organizations Are Assessing B2B Payments Fraud Vulnerability

Organizations seeking to improve B2B payments security should start with reviewing and updating their data security and fraud policies, securing their existing infrastructure and data and implementing technology solutions that will help them remain secure as their businesses grow.

When assessing their B2B payments fraud vulnerability, organizations should ask several questions:

  • What are the primary B2B payments fraud risks and vulnerabilities facing the business?
  • How vulnerable are systems to internal and external attacks, whether by hackers, insiders or remote employees?
  • How can finance and IT departments quantify these risks? What do they mean to your business?
  • How can finance and IT departments best respond to risks? What controls, policies and procedures can your firm implement to mitigate payments fraud?
  • How can finance, IT and security teams work together to monitor, review, report and prevent internal and external payments fraud risks?

Fraud attacks are especially costly to organizations when they impact B2B payments. With fraudsters becoming more sophisticated, organizations must continually improve their ability to anticipate and protect themselves against higher volumes of more advanced threats.