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CurrencyCast

CurrencyCast is a treasury podcast series from currency management experts. In each episode, we look at the pressing foreign exchange (FX) risk issues facing treasurers and CFOs today and help them identify the potential gaps in their FX risk management strategy.

How Treasury Associations Fight Fraud in the Digital Age with Guillermo de la Fuente (S9 E3)

October 16, 2024
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Financial fraud has become a pervasive threat, with criminals constantly evolving their tactics to exploit vulnerabilities. Fortunately, advancements in technology, coupled with the proactive efforts of corporate treasury associations, are a powerful weapon to combat these illicit activities. 

In this blog post, we share some key takeaways from our interview with Guillermo de la Fuente, Senior Finance Executive and Member of the Swiss Association of Corporate Treasurers. We will explore how innovative solutions are helping Treasurers to protect corporate financial transactions.

The growing threat of payment fraud

Payment fraud has seen a significant surge in recent years, fueled by factors such as:

  • Digitalisation: The digitalisation of payment processes has created new opportunities for fraudsters to intercept transactions.
  • Sophisticated techniques: Criminals are employing increasingly sophisticated methods like phishing, identity theft, and social engineering to deceive individuals and businesses. One of the most recent cases was the CFO of a Hong Kong-based company who was tricked into paying $25 million due to a deepfake scam. 
  • Data breaches: Exposes sensitive personal and financial information, making it easier for fraudsters to target victims.

How technology helps prevent payment fraud

To counter these threats, Guillermo emphasises the importance of staying ahead of the curve by adopting innovative technologies and continuously adapting to new threats. 

He highlights the importance of using the same tools as the criminals to level the playing field. Some of the technological innovations treasurers could implement to enhance fraud prevention and detection capabilities are:

  1. Artificial Intelligence (AI):
    • Machine learning algorithms can analyse vast amounts of transaction data to identify patterns indicative of fraudulent activity.
    • AI-powered chatbots can help detect and prevent phishing attempts by identifying suspicious messages or requests.
    • Biometric authentication using facial recognition, fingerprint scanning, or voice recognition can add an extra layer of security.
  2. Blockchain:
    • Immutable ledger: Blockchain technology provides a transparent and tamper-proof record of transactions, making it difficult for fraudsters to manipulate data.
    • Smart contracts: Automated contracts can enforce terms and conditions, reducing the risk of fraudulent activities.
  3. Tokenisation:
    • Replacing sensitive data: Tokenisation replaces sensitive card details with unique tokens, making it harder for fraudsters to exploit stolen information.
  4. Behavioural Analytics:
    • Monitoring user behaviour: Analysing patterns in user behavior can help detect anomalies that may indicate fraudulent activity, such as unusual spending habits or login attempts from unfamiliar locations.
  5. Advanced Threat Detection Systems:
    • Real-time monitoring: These systems can continuously monitor networks for suspicious activity, such as unauthorised access or data exfiltration.

The role of Corporate Treasury Associations

According to de la Fuente, the increasing sophistication of fraudsters necessitates a collaborative approach involving the treasury associations, banks, regulators, law enforcement, and the private sector. All of them play a pivotal role in the fight against payment fraud. 

Corporate treasury associations have been contributing to battle these dangerous fraudsters by:

  • Advocating for stronger regulations: These associations have been working with policymakers to establish and enforce laws that protect consumers and businesses from fraudulent activities. Recently, Guillermo has collaborated with the EACT to drive the implementation of the Legal Entity Identifier (LEI), to help corporate treasurers with fraud reduction, and operational efficiency.
  • Promoting industry best practices: By sharing knowledge and expertise, treasury associations help organisations adopt best practices for fraud prevention and detection.
  • Fostering collaboration: These associations bring together industry professionals to collaborate on solutions and address emerging threats.
  • Providing education and training: Treasury associations offer training programs to help professionals stay informed about the latest fraud trends and mitigation strategies.

Winning the battle against payment fraud

As the threat of payment fraud continues to evolve, corporate treasurers need to strengthen their defenses against financial crimes and protect their firm’s money. Thanks to the numerous technological solutions this can be an easier task. 

At Kantox, data security is a top concern. In a world where cyber threats are increasing and becoming more complex, proactivity in information security is a necessity. Our ISO 27001:2022 certification signifies that we’re not just keeping pace but staying ahead, continually evolving our security measures to protect our customer’s data.If you want to know more about how our automated FX solutions can help you keep complete traceability of your exposure and eliminate FX risk and manual tasks while using currencies. Get in touch with our team of experts.

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