Detect Fraud with Employee Data Monitoring Tools

If one of your employees committed embezzlement, how long would it take your company to discover the loss? According to the Association of Certified Fraud Examiners, the average business does not detect occupational fraud schemes for 18 months.

Fortunately, there are ways to find fraud earlier. When companies implement proactive data monitoring and analysis, they typically detect fraud in half the time, reducing median losses by up to 54 percent.

Technology is the problem & the solution

Most employee fraud schemes depend on technology and access to company data. Therefore, monitoring tools that track employee use of email, the Internet, and corporate technology platforms, such as enterprise resource planning systems, can help your company detect fraud schemes sooner. For example, if an employee creates a shell company to receive fraudulent payments, excessive maintenance of the vendor master file by that employee should trigger a red flag.

A number of detection solutions exist. These include relatively simple platforms that allow you to monitor email and Internet access for questionable activity. Also available is software that can, for instance, capture and analyze the number of emails sent per day and systems accessed per employee. Such technology also can notify you of unusual activity. For example, if employees access servers outside of regular business hours or download large volumes of sensitive company data.

Notify employees

Regardless of the type of software you adopt, make sure you notify employees that you intend to monitor their technology use. Describe in specific terms the extent of the oversight and how you will use the information gathered. Update your employee handbook to reflect any new policy provisions and ask employees to acknowledge receipt. Simply knowing they are being watched will discourage many would-be fraud perpetrators.

For help finding effective monitoring tools, or if you suspect fraud in your organization, please contact us.

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