Amid all of the steps restaurant operators have been taking to remove friction from processes ranging from payment to staff scheduling, there is one area where friction is your friend: preventing fraud in your business. According to Kroll’s 2023 Fraud and Financial Crime Report, 69 percent of global executives and risk professionals expect financial crime risks to rise over the next year, with cybersecurity and data breaches being the biggest drivers.
The spike in digital transactions in recent years has made it easier to commit fraud – but you can take steps to minimize your risks. Bank of America’s State of the Restaurant Industry report advises restaurants to monitor anomalies in their accounts and other back-office operations, as well as take stock of areas of vulnerability. For example, note requests for refunds or payment voids, overpayment notices, digital payments that seem unusual in size or that are arriving from new sources or out of sequence, and communications that seem unusual. You can protect your largest areas of vulnerability by incorporating some extra checks that need to happen before transactions can be processed. That can include adding verification steps on invoice receipts and matching invoices to purchase orders, for instance. When onboarding a new vendor, verify their identity and key details. When you receive an account change request, require wait times or hold payment pending verification. If you receive a payment outside of the expected cycle or if you receive a large payment amount, you can establish review protocols and use protections such as multifactor authentication to make sure the transaction is legitimate. By adding some extra friction in the form of verification checks, you can make your business a less appealing target for fraud.
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As businesses of all stripes have adopted new technology to support operations in the past few years, they have had to tighten their cyber risk management practices. Even insurers who sell cyber insurance are managing their own risk by holding their policyholders to higher standards when it comes to their cyber risk management. Restaurants are no exception – and while the hospitality sector tends to rank lower on the list of attractive cyber targets as compared to other sectors, a cyber attack can still interrupt business, harm a restaurant’s reputation and cause financial damage. As restaurants have adopted new technology for everything from guest payment to inventory management, their shift to digitization has only elevated their cyber risks. Threat actors seek out vulnerability – often in the form of human error. Restaurants, with an ever-shifting employee base, can provide many windows of opportunity for cyber breaches. As your operation adopts new technology, partner with your IT and HR leaders to ensure you limit the number of people with access to sensitive information, that you can readily identify who has access and when, and that those employees receive ongoing training on minimizing risks. Having a non-punitive culture can also help ensure your team feels comfortable bringing a breach or suspicious-looking activity to the attention of a supervisor and, in effect, limits damage to the business. |
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April 2024
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