CFOs ordered to attend fraud prevention courses as financial crime fears surge
55% of CEOs say the Mike Lynch Autonomy fraud trial has raised their awareness of financial crime risks, despite his acquittal
55% of CEOs say the Mike Lynch Autonomy fraud trial has raised their awareness of financial crime risks, despite his acquittal
Hundreds of CFOs are being ordered to attend fraud prevention courses by their bosses, as business leaders respond to the surge in financial crime.
The global study of 600 CEOs in large and medium-sized businesses in the UK and US by Basware, via independent polling agency Censuswide, examining how executives are using artificial intelligence technology to clamp down on financial crime.
A total of 56% of CEOs said they plan to send their CFO on a fraud prevention course this year, with 70% also planning to ramp up their anti-fraud and financial crime budgets.
The news comes following publication of the 2024 AFP Payments Fraud and Control Survey Report which showed Business Email Compromise (BEC) continuing to pose a threat to businesses. The also report revealed that of organisations who were victims of payments fraud in last year, 30% were unsuccessful in recovering funds lost.
Meanwhile, half of CEOs (55%) say that the fraud trial of Autonomy founder Mike Lynch has increased their awareness of financial crime.
In May 2019, the former CFO of Autonomy, Sushovan Hussain, was given a five-year prison sentence and $4m (£3m) fine, plus $6.1m in forfeiture, by a US court for wire fraud, securities fraud and conspiracy counts.
However, former CEO Mike Lynch was cleared on 15 counts of fraud this month.
Sixty-eight percent of organizations were targeted by BEC in 2021,
Additionally, 47% say invoice fraud is a key concern for their organisation this year. In 2023, fraud scams and bank fraud scams against businesses totaled $485.6 billion in losses globally. These scams are having a significant impact on the bottom line of businesses and disrupting financial integrity.
While 65% of businesses reported that their organisation had been a victim of either attempted or actual fraud since Covid, according to JP Morgan research.
To combat it, 62% plan to use AI to fight against fraud this year. AI driven fraud prevention can analyse suspicious behaviours and detect anomalies indicative of payment fraud. Especially when handling large amounts of invoices, AI offers a level of speed and accuracy that can greatly relieve the burden on finance departments.
Jason Kurtz, CEO of Basware said: “Cracking down on financial crime should be a top priority for all organisations. The rise of AI and automated tools to manage transactions and invoices means that identifying suspicious activity and investigating fraud is a much simpler process. In an increasingly complex regulatory environment, it’s vital that all firms operate to the highest industry standards, and ignorance of the facts is no longer a viable explanation.