What Are the Most Common Types of Financial Crimes?

The digitalisation of currency has solved some problems, but others have come to fill the gap. This is the plight of tech. It solves problems, but like the classic game of “whack-a-mole”, totally new issues crop up. The thing is, in the modern world, everything is digital. Did you know more than 50% of all internet activity is conducted on mobile devices?

Did you know white hat technology generates as much if not less than the “black hat” economy? The truth of the matter is both generate around $5 trillion dollars globally. So, naturally, there is a lot of financial fraud using digital avenues to cover digital “footsteps”, if you will. Let’s take cryptocurrency as an example.

The collapse of the cryptocurrency “FTX” is largely a result of financial fraud. FTX was, according to some, a political piggy bank; it was a sort of slush fund for certain interests. This fact is being disputed by the media presently. What is beyond dispute is that financial corruption, or criminal financial activity, resulted in the total collapse of this cryptocurrency.

So regardless of your perspective on this particular issue, it’s clear any business seeking to be financially secure in the regular acceptance or distribution of funds digitally needs to be aware of recurring cybercrime vectors. Following we’ll briefly explore five of the most common digital financial threats of this variety.

1. Money Laundering

It can be hard to determine if money laundering is going on in today’s deceptive digital environment. Cryptocurrency is a common way laundering is done, as discussed in the opening of this writing. Today’s crime-fighting software addresses this issue with AML, or Anti-Money Laundering, software. The following option has top-tier AML to fight financial crime.

You want to be sure investments are in companies that properly protect your digital assets. You also want to be sure you’re not financially involved with any business that generates funds through fraudulent means, as even if you’re not the perpetrator of such crime, association with such businesses represents a liability that might damage you later.

2. Identity Theft

Just because you’re a business doesn’t mean you’re immune from identity theft. Phishing attacks use false emails to trick personnel into providing financial access data or proprietary secrets. Hackers pretend to be managerial staff to hoodwink those down the chain. You need to be on your guard against this and develop appropriate preventative policy.

3. Insurance Fraud

Whether your business is really at risk for insurance fraud can be variable. Granted, schemes of this variety can affect any industry legally required to carry insurance, but some businesses are at greater risk. A fleet of semi-trucks will more likely be impacted than an accounting facility.

4. Credit Card Fraud

Credit card fraud is similar to identity theft, in that crooks steal information necessary to make purchases in place of the credit card’s owner. Be careful company credit cards are used properly and stored properly to protect them from being digitally manipulated.

5. Embezzlement

This is one of the biggest issues a business has to deal with. Whether embezzlement is through scraping digital quantities from the books, or in the form of stolen resources, your employees can be a threat. You need a means of measuring assets to determine if they’ve diminished internally.

Protecting Your Business from Common Financial Crimes

You can explore common financial fraud in greater depth here. Essentially, embezzlement, credit card fraud, insurance fraud, identity theft, and money laundering are some of the most common modern financial crimes your business needs to be aware of and set up protections against. There are others, but these are the “biggest fish”, as it were.