Living in a digital age has come with many practical and technical advantages. Our tools have become faster and more efficient. But unfortunately, they’re not always used for good.
As fintech becomes more accessible to companies around the world, scammers have found an increasing number of opportunities to break into financial systems, making businesses like yours vulnerable to theft, corruption, and significant loss of data.
When it comes to the supply chain industry, there are multiple transaction points at which scams can occur. From pickup to transit to delivery, a lax financial security system could result in a serious loss of profit and damage to your company’s reputation.
Let’s take a closer look at the common risks associated with supply chain industry fintech scams and how you can avoid them in future. After all, knowledge is power!
Fintech In The Supply Chain Industry
A supply chain is only as strong as its weakest link. Unfortunately, in this industry, the potential for weak links is enormous. These systems are especially vulnerable to fintech scams due to the following three industry characteristics:
- Global reach
- Complex second and third-party operations
- High volume and scale of transactions involved
Unlike other systems, the supply chain industry requires multiple (sometimes dozens) of handovers and payment transactions before goods are successfully delivered. This creates numerous opportunities for scammers to intercept and cause problems.
Fortunately, there are ways to foresee and prevent these scams from occurring. From choosing the right platforms to educating staff on scam recognition, you can lower your risk of theft.
6 Ways To Avoid Fintech Scams In The Supply Chain Industry
The only way to prevent and avoid fintech scams from affecting your business is to actively put measures into place to avoid them. With these eight methods, you can strengthen your fintech systems’ security and safeguard your assets in a more sustainable way.
1. Learn how to identify common scams (and then educate your workforce)
Educating yourself and your team members on the dangers of fintech scams as well as how to spot them is essential for running a sustainable supply chain company.
There are many different types of fintech fraud out there, and all of them pose a threat to your company without a solid foundation of awareness around what they look like and how they work. Understanding their strategies can help you identify them with more speed and accuracy.
Learn the difference between presentation attacks, bot attacks, ID theft, imposter scams, deep fakes, Buy Now Pay Later (BNPL) fraud, money mules, and imposter scams.
You can share this important knowledge with your employees through the implementation of fraud identification workshops focusing on fintech, making it an essential part of operations and including it in onboarding and training programs.
2. Monitor your accounts meticulously
Accounts monitoring is a major component of any healthy business strategy. You should be combing your account activity regularly to identify discrepancies and catch any issues before they spiral out of control. This is especially true for fintech scams.
By regularly and meticulously monitoring your financial accounts, you can more quickly pick up on suspicious activity and resolve disputes in a productive, secure way.
Don’t let any details escape you. Set up a thorough and continuous accounts monitoring system (manual or automatic) to sift out inconsistencies and deal with potential problems. Often, scammers start with small amounts to see if they go unnoticed, so check every cost and ensure it matches your outgoing payment list.
3. Utilize multi-factor authentication
Pretty much all companies that involve multiple transactions (such as a supply chain company) require authentication of some kind before payments are allowed to go through. But not enough companies are utilizing multi-factor authentication, which is much more impenetrable.
Examples of multi-factor authentication are facial recognition, password, fingerprint scan, retina scan, voice recognition, and behavioral biometrics such as keystroke dynamics.
Instead of just requiring your staff members or industry connections to provide just one form of authentication, set up multiple hoops for them to jump through in case of a scam.
4. Upgrade your password game
It’s simple but effective. If your supply chain company is too small or lacks the financial capital to invest in some of the higher-powered tools and automation systems, you can still help prevent fintech scams by improving the strength of your passwords.
Create strong, complex, and highly unique passwords that get changed on a regular basis. This will help keep fintech fraudsters out and make it much harder for them to intercept.
5. Choose the right platforms
The right platforms can make a huge difference to the security of your fintech system. When choosing payment platforms for your fintech services, always choose the most reputable and well-established ones.
Research reviews and recommendations to find the best options to suit your specific needs, whether this means finding platforms that facilitate international transactions, allow you to invest in stocks using a portion of your profits, or streamline bulk payments.
It’s much safer to go with a reputable fintech platform that has at least a few years of history behind it than a new one that no one knows anything about. The more information you have about these systems, the easier it is to prevent avoidable scams and theft.
6. Follow fintech scam news and trends
Don’t underestimate the power of staying on top of the news. Keeping up to date on fintech trends will give you the necessary insight into the world of scams and fraudulent activities and help you to better prepare for them, now and in future.
The more you understand about fintech fraud, the easier it will be to avoid it. Follow news sites online and chat with your industry peers about which methods and practices are best.
Conclusion
Regardless of the industry you find yourself in, cultivating a keen knowledge of fintech scams and common forms of digital theft is essential for any business with interests to protect.
Considering how common these kinds of scams have become, learning how to avoid them is crucial for businesses that want to retain control over their finances. With the help of these tips and tricks, your supply chain company can detect and prevent fintech scams more easily.
Article and permission to publish here provided by Lauren Prentiss. Originally written for Supply Chain Game Changer and published on July 12, 2023.
Cover image by Fakhruddin Memon from Pixabay