A Growing Threat: Are large global corporations safe from cross border payments fraud and errors?


In February 2016, the Bangladesh bank heist sent a massive wave of anxiety through the world’s commercial banking sector. The industry continues to ponder how this could have happened to the banking network when it is protected by highly sophisticated procedures and systems to manage their complex web of global payments.

In March 2015 another incident caused concern when a man received GBP1.25 million from a UK bank by mistake. This caused many to wonder how a simple human error could cause such a large discrepancy. In both of these incidents payments were being made to the wrong parties, either through fraudulent or through an honest erroneous mistake.

While these incidents are alarming for many reasons, multi-national corporations are growing especially concerned. More than ever, these organizations are exposed to the myriad of risks within international payments as they take on a more global workforce and client base. Today, it is commonplace to find a multi-national that sources and procures products and services from tens of thousands of suppliers globally while also hiring thousands of employees from across the world.

For this reason, the risks associated with cross-border payments have become critical for these large companies. Corporate payment processing teams are tasked with the responsibility to ensure that they have proper payment details for their suppliers and employees at all times. They are also adding additional steps to their payments processes to protect themselves from errors and fraud.

However, as recent incidents show, corporations might need to make further considerations when implementing their payment process. First, they must ensure that they have sufficient checks to confirm that no one has tampered with payment details. Secondly, they must develop a systematic approach in maintaining and updating the bank details to avoid erroneous payments due to mistakes.

Accuity has spoken to corporate treasurers and accounts payables clients in Global Finance Shared Service Centers in Asia. The following represent some of the best practices these groups have shared to help prevent fraudulent or erroneous payments:

  1. Maintain a central reference banking payment database to validate the banking details that are provided by the employees and suppliers.
  2. Allow suppliers and employees to perform a ‘Self Service Registration,’ backed by a mechanism to validate the beneficiary bank details supplied to prevent fraud and mistakes.
  3. Process payments through a process that is systematically generated and sent to the banks directly with an audit trail.

As payments risks continue to threaten multi-national corporates, it becomes even more important that they use these best practices to protect themselves. Learn more about how Accuity helps corporates with their payments processes and bank master data.

Follow us on @accuitytweets and Accuity LinkedIn