Commercial Insights

How to create a culture of fraud awareness

Key takeaways

• Employees are often the first line of defense against payment fraud.
• Creating a culture of fraud awareness can help businesses reduce fraud losses and identify suspicious activity before money leaves the organization.
• The STOP, CALL, CONFIRM approach can help employees verify payment requests and vendor changes before completing transactions.
• Ongoing fraud training is important for businesses of all sizes, from growing companies to larger organizations with dedicated finance and treasury teams.
• Internal controls, employee awareness and verification procedures work best together as part of a comprehensive fraud prevention strategy.

Why is a fraud awareness culture important?

A strong fraud awareness culture helps employees recognize suspicious activity, verify unusual requests and follow procedures that can help prevent financial losses. Businesses of all sizes can strengthen their defenses by making fraud prevention part of everyday operations.

Your employees should be your first line of defense against fraud.

For businesses, it can be difficult to avoid losses associated with fraud. In fact, 79% of organizations surveyed by the Association for Financial Professionals reported experiencing payment-related fraud incidents.

“Creating a company culture where payment fraud can’t thrive is so critical,” says Jeff Taylor, head of Commercial Fraud Forensics and Payment Strategy at Regions Bank. “Human risk management is a strategy to involve employees in the risk management process, emphasizing the value of educating employees on the red flags and detection tools required to recognize potential fraud.”

Whether your business is launching, growing or operating at a larger scale, a human risk management culture should emphasize awareness and due diligence among employees. To reduce payment fraud, organizations should focus on employees involved in money-related functions, including finance, treasury, accounts payable and accounts receivable.

Heightened awareness is especially important because many payment fraud incidents occur as a result of complacency, says Taylor.

“Like driving a car, we get so used to doing things automatically that we sometimes don’t pay full attention to what we’re doing.”

How employees can help prevent payment fraud

To support a culture of awareness, Taylor suggests training employees to STOP, CALL and CONFIRM new information before completing transactions.

• STOP before responding to a payment request, account change or other financial instruction.
• CALL the organization directly at a known number.
• CONFIRM the legitimacy of the request before moving money or updating payment information.

Creating a payment process checklist can also help ensure a consistent and comprehensive verification process.

“If you see a change, it should be a red flag to pause and verify that the supplier really sent it,” Taylor cautions. “Add some pause points in your process for verification, especially above a certain dollar threshold.”

Likewise, consider building more time into your company’s payment process.

“Fraudsters use urgency and time constraints to force payment control shortcuts,” Taylor explains.

Commit to ongoing fraud training

All employees, particularly those connected to money and money movement, should participate in periodic fraud training. Taylor recommends a regular training program supplemented by ongoing communications throughout the year.

“Fraud training is your best protection. It’s critically important to be aware of the latest developments and to keep talking to employees about how the risk of fraud can impact them,” he says.

For larger organizations, compliance, finance and risk management teams can help lead fraud awareness initiatives and update training programs. For smaller businesses, formal training budgets may be limited, but leaders can still help employees spot and prevent fraud by sharing trusted educational resources and discussing common fraud scenarios during team meetings.

Why fraud awareness matters for every business

Fraudsters often target businesses regardless of size. A strong fraud awareness culture helps employees recognize suspicious activity, question unusual requests and follow established procedures before funds are moved. Combined with effective internal controls, employee awareness can help reduce payment fraud risk and strengthen your organization's overall security posture.

As cases of payment fraud and business email compromise continue to rise, it’s also important to implement internal controls and maintain consistent payment verification procedures. Learn more about how to safeguard your business from payment fraud.

Take the next step

Building a culture of fraud awareness does not require a large budget or dedicated fraud team. Start by evaluating your current payment processes, identifying areas where verification steps can be strengthened and ensuring employees understand their role in protecting the business from fraud.

Consider these actions:

• Train employees to follow the STOP, CALL, CONFIRM approach before processing payment requests or account changes.
• Create payment process checklists that help employees verify supplier information and unusual requests.
• Establish regular fraud awareness training and communications to keep employees informed about emerging threats.
• Review your internal controls and payment approval processes to help reduce fraud risk.
• Explore Regions business fraud prevention resources for additional tools, education and guidance.