Professionals across industries this time of year are sharing their “2025 Predictions.” The coming change in leadership here in the United States certainly gives us plenty to hypothesize about, and in the fraud space in particular, cybersecurity and AI continue to dominate peers’ lists. With billions of dollars in losses sustained by organizations in 2024 due to cybercriminals, and the various uses of artificial intelligence to perpetrate those crimes at scale, I have no doubt that trend will continue. We can read these predictions and worry, wondering how to stay ahead of unknown threats, or we can take a different approach.
Many of us, in light of the season, have begun making promises to ourselves – “New Year’s Resolutions” we call them – commitments to change certain personal behaviors that will positively impact our lives in new year ahead. Leaders should consider the opportunity to make resolutions for their organizations as well. From a fraud prevention standpoint, I know just where to start.
- Make Honesty and Integrity Your Personal and Professional Core Values: There’s a reason stakeholders place a lot of weight on a leader’s personal ethics; “tone at the top” of an organization influences behavior all the way to the bottom. Where management ignores or otherwise lacks honesty and integrity, employees are more likely to follow suit, increasing the risk of fraud.
- Develop an Anti-Fraud Strategy: Start small. A strong anti-fraud policy helps set a tone of zero tolerance. Hosting confidential fraud hotlines or web reporting methods allows for faster detection and providing anti-fraud training for employees cuts fraud losses in half, according to the Association of Certified Fraud Examiners. None of these measures break the bank. Certainly, when you are ready to double down on your zero tolerance for fraud, formal risk assessments, penetration tests, and establishing internal audit functions are ways to level up and keep pace with new risks.
- Build a Culture – and System – of Accountability: When you do what you say you’re going to do, and allow others to do the same, even when it’s hard, you set the tone for accountability. A pattern of face-to-face conversations and daily oversight that worked earlier in your leadership becomes harder and harder to maintain as you and your team grow. Therefore, building systems of internal controls are a necessity. But building them alone isn’t enough – continually monitoring and evaluating their effectiveness is the strongest measure of protection.
Bottom line, your organization’s tolerance of fraud starts with you. If you aren’t willing to invest in anti-fraud controls at even the smallest levels, you are ignoring risks, not addressing them. When you ignore risk, it teaches your employees that it’s okay for them to do the same, and you create a culture that invites fraud, waste and abuse instead of preventing it. Let 2025 be a year of improvement.
If you need further guidance or have any questions on this topic, we are here to help. Please do not hesitate to reach out to discuss your specific situation.
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