How strong policy and AI-powered tech can reduce fraud
Tips to stay protected with automated expense management tools
Sadly, fraud is a fact of life. For businesses, it’s a reality they take very seriously to safeguard their assets, reputation and stakeholder trust. Fortunately, with the progress of Artificial Intelligence (AI), businesses can now spot and stop fraud more easily and quickly.
So, what are companies doing, and how are they using technology to prevent fraud before it happens?
Read on to see how tech, policy, and AI join forces to combat fraud and discover why AI-driven expense tools, like Expensya, empower you to take control of your financial security.
The rise of fraud
With the increasing digitization of financial processes, fraudsters have found new ways to exploit vulnerabilities. For instance, there have been cases where identity theft, invoice fraud and expense padding have cost companies significant amounts –with a $145,000 median loss per fraud case.1 Traditional methods of fraud detection, reliant only on manual review and auditing, can fall short in today's fast-paced business environment.
Did you know most fraud happens from within an organization—known as occupational fraud?
According to the Association of Certified Fraud Examiners, organizations lose five percent of their revenue to fraud yearly, and 12 percent of fraud happens within the accounting and finance departments.1
In fact, a Medius’s Financial Census study found that fraud costs U.S. businesses an average of $300K annually. This financial loss can be alarming for finance and AP professionals managing expenses and accounts payable, underscoring the need for robust fraud prevention measures.
More than half of occupational fraud is due to insufficient internal controls.1 So, while the statistics are staggering, the good news is that you can stay protected with the proper preventative measures.
Technology and policy are best friends
To tackle fraud effectively, you need both strong technology and policy –one without the other is not enough. Here are some key strategies to implement:
Establish clear rules and procedures for finances, expenses, and vendors. Teach employees about these rules and the consequences of fraud.
Invest in AI tools that can spot and stop fraud, like AI-driven expense trackers that can catch odd patterns and flag suspicious transactions on the spot.
Analyze spending data to spot risks. By sifting through large amounts of data, companies can uncover tricky patterns that hint at fraud.
Use monitoring systems to watch transactions closely. These systems can flag unusual activities for quick action.
Educate staff on fraud, how to spot it, and what to do. Foster a watchful and responsible culture throughout the organization. Employees are the first line of defense against fraud, and their awareness and vigilance can significantly contribute to fraud prevention efforts.
AI-powered expense automation: your ally in fraud prevention
A policy is critical when combating fraud, but technology plays an equally important role. The emergence of AI-powered expense management tools, like Expensya, leverages machine learning algorithms to analyze expense data, identify discrepancies and detect potential fraud. Here's how they work:
- Pattern recognition
AI algorithms analyze past expense data to spot trends and patterns. This helps detect irregular spending like duplicates or unauthorized expenses.
- Anomaly detection
AI tools flag anomalies in real-time by comparing current expenses to historical benchmarks –helping companies investigate suspicious activities promptly and minimizing losses.
- Receipt analysis
AI can automatically analyze receipts and invoices for inconsistencies or irregularities, including vendor information, detecting duplicate expenses, and identifying altered documents.
- Policy compliance
AI-powered tools can enforce compliance with company expense policies by automatically flagging violations and suggesting corrective actions, keeping employees aligned with company policies.
How Expensya can help
Expensya is a powerful, user-friendly expense automation solution that simplifies your spend policy. Set up expense rules, limits, and alerts effortlessly. With Expensya’s Smart Policy, you have the power to monitor, control, and validate employee expenses in line with your company’s policy using automated validation workflows.
Tips for proactive fraud protection
To effectively leverage AI-powered tools in the battle against fraud, consider these proactive key actions:
Allocate resources for tools like AI-powered expense management solutions and AP automation tools.
Integrate AI-powered tools into existing financial systems and workflows for maximum efficiency and effectiveness.
Foster a sense of teamwork between finance, IT, and compliance teams to ensure everyone is on the same page regarding fraud detection and information sharing. It’s a collective effort.
Keep checking policies, internal compliance, employee awareness, and AI-powered tools regularly to stay ahead of evolving fraud tactics.
Stay current with the latest trends and fraud detection tech to avoid new threats, especially in your specific industries and roles.
Get everything you need to stay protected from fraud with AI-powered Expensya.
