Micro-, small-, and medium-sized enterprises (MSMEs) account for around 90% of all businesses worldwide, and contribute about half of total global employment. These enterprises are the cornerstone of economic activity, and play a particularly critical role in developing countries.
According to the World Bank, SMEs make up seven out of every 10 jobs in emerging economies, and as such will be essential in delivering on the 600 million jobs required by 2030 in the face of a growing global workforce. That’s why protecting them from fraud is such a vital piece of a healthy global economy
June 27 is a day that marks the importance of these enterprises, on the UN’s Micro-, Small- and Medium-sized Enterprises Day. It is also a day to reflect on how as innovators and business enablers, enterprises like Neural Technologies play their own role in supporting this ecosystem, creating robust, resilient MSMEs with an effective fraud management system.
The fraud battle facing MSMEs
MSMEs are by their nature businesses with limited resources. While the difference between a small micro-enterprise with two employees and a medium-sized operator with several national offices is distinct, the reality is that, unlike global giant multinational companies, MSMEs must make careful considerations about how and where resources are deployed.
This resource constraint means engaging the right technical talent, understanding, and technology to maintain appropriate fraud protection in our rapidly changing and connected global environment is a persistent challenge.
Good fraud management requires the knowledge and knowhow to implement appropriate fraud prevention, with policies or procedures designed to limit fraud exposure. It requires the technology or risk analysis skills to detect early warning signs of fraud, both internal and external. Even if fraud is ultimately identified, MSMEs then face the need for an investigation to analyze how and where fraud has occured, and engage the appropriate response
This system of preventing, detecting, and investigating fraud can be a challenge in even the largest enterprise, where dedicated fraud protection analysts are working to reduce revenue losses and fraud risks. For MSMEs, the task of fraud risk management is even more daunting, as they seek to leverage limited resources to address these crucial business challenges.
A remarkable 61% of fraud is a result of poor internal controls according to a recent report by KPMG—Global profiles of the fraudster. These are particularly difficult areas for MSMEs to address, as these enterprises often work in very operations-focused environments. What’s more, 62% of fraud is undertaken in collusion with others, meaning MSMEs often face the challenge of fraud attacks from a coordinated group of fraudsters.
The challenging and opportunity of fraud technologies
Evolving technology presents a fascinating new front for MSMEs, triggering new fraud approaches by fraudsters, but at the same time offering a powerful solution to prevent, detect, and investigate fraud.
According to the KPMG report, technology was a major enabler in almost a quarter (24%) of frauds. Yet increasingly sophisticated data analytics approaches like Neural Technologies own sophisticated Fraud Management solution offer a powerful answer to address these risks.
KPMG highlights that just 3% of fraud is detected through proactive data analytics, leveraging increasingly powerful data solutions on the search for fraud due to anomalous or suspicious business activity.
The reality is that adoption of digital capabilities at SMEs has increased over the last decade, yet still remains at between 40%-80% of SMEs according to the latest research by the OECD. Most alarmingly for appropriate fraud management, big data remains one of the least advanced areas with less than 30% of SMEs engaging in these skills. Without the right data and understanding, tackling fraud is virtually impossible for any enterprise.
User-friendly, scalable fraud management is key for MSMEs
If MSMEs are to be supported to address their fraud management risks, they need access to intuitive, user-friendly tools that can scale with their business growth.
Neural Technologies’ Fraud Management solution is designed to address the needs of enterprises of all sizes, incorporating their data into an effective and sophisticated solution that can rapidly identify fraud risks. It acts at the heart of the need to prevent, detect, and investigate fraud, and provides simple integration for even those enterprises with more limited technical expertise.
Our solution protects enterprises from a wide range of fraud types, and provides oversight to address the major fraud challenges that MSMEs face. It is highly customizable, meaning it’s not just designed for major multinationals, but can be deployed in the right way to assist your organization.
Unlike traditional rules-based systems, which require manual intervention to meet changing needs, the use of artificial intelligence and machine learning techniques enables Neural Technologies Optimus platform to learn and reinforce its understanding of fraud, a vital functionality in an evolving landscape. At the same time, the advanced data mining functionality provides a valuable and proactive fraud management response, providing a complete view of all cases under investigation.
Our Fraud Management solution is designed to be intuitive to use, and allow enterprises to adapt to both changing scale, and changing business conditions. That means business owners have full control, without the need for costly intervention to adjust the recognised fraud conditions.
In a rapidly changing business environment, fraud remains a persistent risk for MSMEs. The need for a fraud management system that can adapt and scale to meet evolving risks, while keeping pace with the growth of ambitious enterprises, is a powerful solution to address this challenge.