As fraud eats its way through profits of some of the richest FTSE 250-listed businesses in the UK has your company got all possible cyber safeguards in place and if not, why not?

There’s no longer room to hide behind inaccurate loss predictions, complacency or ignorance – data mining techniques can now provide board members, shareholders and managers with all the accurate fraud loss forecasts they need.

For many top businesses it can seem like a mountain to climb, while other more prepared companies may need to revise existing cyber safety policies to move beyond mere box-ticking and legal compliance.

‘Improve every little thing by 1%’

But whatever level of cyber safety you want to achieve, you may find comfort in the successful approach of former British Olympic cycling coach Sir Dave Brailsford. He broke down everything that could affect his cyclists’ performance, then improved every little thing by 1%, and “when you clump it together you get a significant increase in performance”.

The secret is knowing what to implement yourself preemptively and when to ask for help from investigation agencies like Blackhawk Intelligence, which track down fraudsters using the latest forensic computing and surveillance techniques.

Everyone must be who they say they are

First, though, is the task to get your house in order. Make sure new recruits and supply/trading partners are who they say they are. Many background checks can be done online and you can verify a person’s financial creditworthiness by using a credit request agency like Equifax. But if you “smell a rat”, Blackhawk can undertake the painstaking exercise of delving behind what can be an impressive online presence to let you take a fully informed decision.

You have to be open-minded and dare to up-end valid business practices – they can be ‘red flags’ for fraudulent behaviour. So check out your successful heads of subsidiaries or departments that constantly turn out high profits or exceed quarterly projections year after year. Is there something fishy?

Acknowledging managers’ positions in the business, giving responsibility to more junior workers, and assigning jobs to the specialists trained for them will earn you respect and loyalty in what can be a very sensitive time. Monitor staff behaviour as well as results. And don’t fall into the trap of copying the practice of another company without giving it a due diligence check first.

It’s down to you to change the company culture

While an outside agency like Blackhawk can do deep background checks plus exhaustive surveillance work and forensic computing work once fraud has been detected, it’s up to you to change your company culture if it’s needed.

Staff, for instance, can start rationalising fraudulent action by saying no one’s got hurt and, anyway, it’s for the firm’s benefit.

Here management should be seen to set ethical standards, broadcast the company’s (new?) code of ethics, and appoint someone to confidentially advise and listen to staff who can talk freely on ethical matters. Have you thought about an anonymous hotline for whistle-blowers?

Name and shame company fraudsters

Avoid using Excel software for expenses, which is fraught with temptation by staff to add in unjustified items. Arrange for expenses to be gathered up promptly and not left for several weeks, and name and shame – enter details of any previous fraud in the company newsletter.

But suppose you have set everything in place and yet something still doesn’t seem right? What if you are dealing with partners in Russia, Africa or the Middle East – traditionally often highly lucrative but also very risky markets? You are a big company and seeking a reliable agency. Do you go for a big, often good but, more often than not, impersonal investigation agency that may subcontract, or a specialist, more compact unit like Blackhawk Intelligence that provides a tailored, bespoke service.

Where due diligence bribes are commonplace

Blackhawk never subcontracts in the typical sense or sees such work as a commodity; rather, it always uses a network of closely tied resources at home and overseas it knows well and regularly works with. It relies heavily on material supplied directly by close associates of the person being investigated.

The agency says bribes are sadly often de rigueur in Africa and other risky markets if you don’t know the people you are working with. It is common for a subcontractor to tell a company they have been asked to do due diligence checks on: “If you don’t pay a bribe, our report will be negative.”

Remarkably, some big FTSE clients just want a stamp to tick-box due diligence checks in order to meet compliance laws. So the detailed final report that Blackhawk and other reputable agencies produce may not actually get read. Staff re-education is the only way forward!

You can learn a lot from dogged surveillance

Another Blackhawk speciality is surveillance work. If a client wants to find out more about an employee who it suspects is setting up a clandestine rival business, day-by-day covert surveillance on where they work, who they meet, where they shop, if they have kids, etc reveals a great deal of information that is compiled in an extra Lifestyle report.

When are the optimum times to call in an agency? Go with your gut instinct. It’s any time you feel out of depth in a major deal or a notoriously difficult country. Any time you have been religiously doing your checks, and the results don’t feel right, or you’re not getting the information you asked for, or it’s all taking too long. Then the red flags will start fluttering furiously – it’s time for the professionals.

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FTSE-250: how to change the culture and kill fraud

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As fraud eats its way through profits of some of the richest FTSE 250-listed businesses in the UK has your company got all possible cyber safeguards in place and if not, why not? There’s no longer room to hide behind inaccurate loss predictions, complacency or ignorance - data mining techniques can now provide board members, shareholders and managers with all the accurate fraud loss forecasts they need.

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