In BtoB, when entering into contact, the system for combating documentary fraud makes it possible to secure the opening of accounts receivable, the obtaining of loans, etc. It manifests itself by a special vigilance focused on:
- forgery of a document through reproduction
- falsification of an original document by a modification of one or more elements
- the usurpation of a person’s identity
Technologies facilitate and amplify documentary fraud
In addition, with the rise of digital technology, new risks are emerging. Technologies facilitate and amplify document fraud. They make it easier for smart and financial crime, harm to probity – integrity – honesty, tax and customs offences and labour legislation. With the democratisation of technologies and the dematerialisation of procedures resulting from the simplification of customer approaches and the improvement of customer experience, a document can be easily scanned, even modified, and then deposited on a platform. Thus, mechanically, the risk of fraud increases. The dematerialization of documents and processes as well as electronic signature represent major economic, social and technological issues for our society. These developments must take into account the applicable rules of proof to avoid harming the rights of the persons concerned. Moreover, the new technologies around cryptocurrencies, the ICO (Initial Coin Offering) * and the new payment services also contribute to facilitating the manoeuvres of the perpetrators of fraud. Their techniques rely largely on the internationalization of the rapid flows of capital.
All of these frauds have a corrosive effect on a country’s economy, distorting business decisions, increasing the risk of bankruptcy of financial institutions, depriving the government of control of its economic policy, damaging a country’s reputation and exposing economic actors to criminal activities.
The KYC, the tool for combating fraud
On the business side, the fight against fraud is organised around three letters: the KYC (Know Your Customer) or customer knowledge. In BtoB, this already old and widely regulated concept for certain taxable actors (banks, insurances mainly), allows to verify the identity of the customers when entering into relationships, by presenting a set of documents: extract from KBIS recent, copy of RIB, company statute (certified according to the manager), proof of the identity of the manager or the president of the company. Among the solutions adopted by any type of company (to the regulated activity or not) are the questioning of repositories, checking the consistency of information and business rules around automated processes integrating, for some, the implementation of artificial intelligence. This organisation allows to concentrate human resources on the most at risk cases, while benefiting from tools to support decision-making.
A study carried out by Markess reveals that for 40% of decision-makers, documentary fraud is a growing concern. The Euler-DFCG 2019 study states that 70% of companies experienced a proven fraud in 2018. A quarter of the 336 companies surveyed experienced more than five! To achieve their goals, fraudsters are still plebiscite identity theft:
- false suppliers: 47%
- False leaders: 29%
- False customers: 25%
- false partners of the company as banker, lawyer or auditor: 30%
These studies illustrate that the fight against fraud must be the concern of any company, whether or not it is subject to prudential obligations.
To be followed in a next article: the procedures to be put in place to respect compliance in the fight against money laundering and the financing of terrorism.
* method of raising funds through the issuance of digital assets
