Expert Investigations

Workplace fraud is a serious issue affecting businesses across the UK. In the past year alone, UK companies reported losses of billions due to fraudulent activities. From employees misappropriating company funds to manipulating financial records, the financial and reputational damage caused by fraud can be devastating.  

The Scale of Workplace Fraud in the UK

Fraud is a widespread issue in the UK, particularly within businesses of all sizes. The UK economy could be losing as much £219 billion to fraud. This colossal figure is one of the key findings of the 2023 Annual Fraud Indicator (AFI). Workplace fraud is particularly troubling because it often involves trusted employees. It can be difficult to spot, especially when those involved have insider knowledge of company systems and procedures. As a result, many businesses suffer financial losses that go undetected for months or even years.

One effective way to combat fraud is through a strategy known as target hardening. Target hardening refers to the implementation of security measures that make it more difficult for fraudsters to succeed in their attempts. It involves strengthening physical and digital controls, creating a more secure environment, and deterring fraudulent behaviour. In the context of workplace fraud, target hardening aims to make fraud less appealing, harder to commit, and more likely to be detected early. Target hardening can be an effective method to reduce these risks and protect your business from fraud.

Target Hardening Tips to Prevent Workplace Fraud

Implement Strong Access Controls

    Restricting access to sensitive information is one of the simplest ways to deter fraudulent behaviour. Ensure that only employees who need access to specific data or financial systems are granted permission. Use role-based access control (RBAC) systems and regularly audit who has access to what.

    Use Multi-Factor Authentication (MFA)

      Passwords alone are no longer enough to protect sensitive company data. Implement multi-factor authentication (MFA) to add an extra layer of security. This ensures that even if an employee’s login credentials are compromised, a fraudster cannot gain access without the second authentication factor.

      Monitor Financial Transactions Closely

        Regularly monitor financial transactions and conduct random audits. Set up automated alerts for unusual activities, such as large transfers or expenses that deviate from the norm. Fraudsters often attempt to hide their actions in plain sight, so regular scrutiny is essential.

        Educate Employees on Fraud Prevention

          Create a culture of awareness around fraud risks. Offer regular training sessions to employees on how to spot fraud and what to do if they suspect it. An informed workforce is less likely to fall victim to or turn a blind eye to fraudulent activity.

          Promote a Whistleblowing System

            Encourage employees to report suspicious activities by setting up an anonymous whistleblowing system. Employees should feel safe in reporting fraud without fear of retaliation. Ensure that there are clear channels for reporting concerns, and take all reports seriously.

            Secure Physical Access to Sensitive Areas

              Physical security should not be overlooked. Restrict access to areas where sensitive documents, cash, or valuable assets are kept. Install CCTV, use key cards, and ensure that staff are properly vetted before granting them access to secure areas.

              Strengthen Internal Controls

                Implement strong internal controls that limit the opportunity for fraud. For example, divide duties so that no single employee has control over all stages of a financial transaction. This reduces the risk of fraudulent manipulation.

                Conclusion: Where Target Hardening Can Help You

                Target hardening is an effective way to reduce the risk of workplace fraud in your organisation. By implementing robust security measures, educating employees, and fostering an environment of transparency and accountability, businesses can significantly decrease their vulnerability to fraud. While no strategy can eliminate the risk entirely, target hardening makes fraud harder to commit and easier to detect, helping protect both your bottom line and your company’s reputation. If you need more advice on how to implement target hardening effectively within your organisation, please contact us.