Companies incurring heavy losses as IT-based frauds on rise

Cases of IT-based frauds are increasing in organisations, raising concern among corporate houses and external key stakeholders on ways to detect and prevent such incidents, as companies have reported significant losses.

Companies should hire the "right people with integrity and competency" to detect and prevent fraud, Abdulqader Obaid Ali, President, UAE Internal Audit Association, told CIOMajlis a Smartworld initiative that seeks to share experience, enhance knowledge, and explore business solutions for its members.

Addressing the CIOMajlis in Dubai on the topic ‘Information Technology - Fraud, Prosecution and Prevention,’ Abdulqader said, "Whenever you hire somebody in your organisation, you hire the person for two things: integrity and competency. Invest more in people, educate them and select the right people.

"Fraud comes in different ways. When you take something that does not belong to you, or when you abuse your authority or access information for personal gains, frauds are perpetrated," he added.

Chief information officers, CIOs, should go the extra mile and educate employees on the danger of sharing passwords, while explaining the logic behind it. When employees are told to change their password every three months, they may not like it, nor do they appreciate the need for it. It is important to invest in people and create awareness, he said.

"CIOs have a crucial role in detecting fraud in their organisations. They can educate people about what is happening in their organisations, because CIOs spend a lot of time and effort in protecting their system using firewalls, etc," said Abdulqader, who is also the Chief Executive Officer of Smartworld.

Ahmed Al Mulla, Chairman of CIOMajlis, who is also the Senior Vice-President, IT, Emirates Global Aluminium, added, "Today, most companies depend on IT. Most of your applications actually run on the systems. The role of CIOs is to facilitate the systems so that they can detect fraud, looking at patterns, looking at repetitions, dummy employees or dummy transactions. Many companies use dummy transactions on their systems.

"Technology is the challenge before a CIO. Technology, in fact, is the support. The challenge is to the human. No matter what you do, you can always work outside the system. The CIO's role is to ensure that nothing happens outside the system. Then the system can support that," he added.