Protecting your business payments from fraud seems simple enough.
You (hopefully) know not to answer any dodgy looking emails featuring Nigerian princes who are just desperate to transfer £100k into your bank account, for a small price.
With the rise of online and mobile banking, consumers and businesses have become savvier about security than ever before.
So why are we still reading stories about payment nightmares?
Missing money isn’t always malicious…
Now, I’m not saying that there aren’t thousands of malicious people out there trying to steal your bank details and that cyber security isn’t an issue, because it certainly is. In fact, the problem is “significant and growing” according to the UK’s National Crime Agency and National Cyber Security Centre.
But these days most employees are, at the very least, aware of phishing emails and the importance of 2 factor authentication. And if you’re not, find out all about it here.
This blog isn’t about that. We’re talking about something that is much more prevalent, and somewhat harder to catch – human error.
Now you might be asking yourself, how much of a problem is human error, really?
It’s needless stress, and no one likes that!
Internal mistakes can cause chaos
Imagine you’re a teacher. You’ve got kids to feed and bills to pay. Perhaps it’s your son’s birthday at the end of the month, and you can’t wait to buy him that Nintendo Switch he’s been asking for.
It’s payday. On your way into work, you check your salary via online banking. To your horror…not only have you not been paid, but your account status is sat WAY into the overdraft.
What? Your heart starts to beat. You check again. The numbers haven’t changed.
You think, that can’t be right! But, unfortunately, it is.
That’s exactly what happened to teachers in the Oakland School District in December 2017.
Luckily, the mistake was rectified fairly quickly after being discovered at 9.30am. But that didn’t really help placate the teachers, when their pay checks ended up getting reversed, instead of paid in.
Now, I don’t know about you, but taking money from staff when they’re expecting a full month’s wage doesn’t sound good for internal morale to me.
And do you really think the affected staff were focused on teaching that day? Or were they too worried about the payment fiasco going on behind the scenes? I’d presume the latter.
Things got worse in Oakland after it was revealed that the embarrassing mistake was all down to human error by an undisclosed employee. It may have been fixed, but staff trust was completely gone.
What can be done to prevent this?
There are lots of ways to avoid human error within the AccessPay platform, and one thing we recommend to all of our clients is segregation of duties.
Segregation of duties is an additional step in payment processing, and it involves the approval of payment files by more than one person before they are finalised.
Ever hear that two heads are better than one? Segregation of duties is a sure way to prevent a mistake from seriously irritating your staff due to problems with payroll.
In the Oakland School District example above, having more than one employee reviewing the payroll documents could have stopped a huge headache for those poor teachers, and avoided a whole lot of embarrassment, distress and bad PR for the schools involved.
As technology develops, it becomes easier for one person to take on several tasks. But this doesn’t always save time. Skipping vital internal controls can mean serious oversights fall on the head of one potentially oblivious employee, simply because they didn’t check every file diligently enough.
No matter the size of a company, all can benefit from the extra layer of security that segregation of duties brings. All it involves is the introduction of the appropriate checks, associated privileges and signs offs.
It’s a simple idea, but it’s key to protecting your business payments from human error, and those costly mistakes that no one wants to happen.
Want to know more?
Payment nightmares like the one mentioned above can be easily avoided with a reliable payment software such as AccessPay. But they still happen. Don’t just take our word for it.
Browse through our security & fraud prevention page to find out about segregation of duties within the Detect module.