What is Considered a Financial Crime, and How Can You Protect Your Business From It?

Financial Crime Defined
When it comes to “financial crime”, there are many things that might fit under the penumbra of the term. Technically, being mugged is an instance of financial crime; but that’s not what people mean when they use the term. Generally, the term refers to crimes committed by one person or a group which involve taking money or property from others for financial gain.

While mugging and burglary fit under that definition, when people use the term they’re more likely to mean things like digital fraud. Con-men, embezzlement, insurance fraud, pyramid schemes; these are the sort of things that are traditionally considered to be “financial crime”.

In this writing we’ll explore a few aspects of financial crime that are often unconsidered or misunderstood to help give you a better idea what to watch out for, and how to protect your business from being impacted.

  1. Compliance Issues
    One reason financial crime happens is that thieves are able to “slip through the cracks” when businesses aren’t exercising proper compliance of varying data networks. You can learn more on NICE Actimize. A simple solution to this issue is remaining in compliance, but even then, that doesn’t mean you’re not vulnerable.

It’s necessary to have proper firewalls that prevent hackers from gaining access to sensitive data or financial information. Also, you want to have antivirus protocols, and monitoring which can identify anomalous activity which may indicate financial theft. If you’re compliant, that doesn’t mean you’ll be safe from hackers.

Finally, look into social engineering hacks like “phishing”, which may use an email or a phone call to deceive an employee into willingly giving up personal information.

Click here – Quick Tips to Boost Relationship with Chinese Business Partners

  1. Embezzlement Problems
    Embezzlement is when employees deliberately steal from your company. Often, they’ll do so in financial areas that are “liminal”.

For example, a contractor may put in a bid of $2k for work on a bathroom on a floor of a building your corporation owns. The man in charge of hiring the contractors may report their final cost was $2,250, paying them $2k and then pocketing $250 for himself.

The solution to embezzlement issues is using software and protocols to keep track of every penny very carefully. In this situation, before payout, you may require the contractor’s invoice be entered into your data network by the contractors themselves. Essentially, you want to reduce any “loopholes” or “liminal” areas an underhanded employee might use to steal.


  1. Identity Theft
    Personal identity theft is common and understood, but what many don’t realize is that identity theft can happen on behalf of a business. A hacker might use social engineering hacks to steal financial information and other proprietary data which can be used to promise goods or services from one company to another company.

Then the thief can be “paid” or given resources from their target, giving them in return a fraudulent promise from your company that your company never made. What’s the solution? Just as you protect your personal financial information from identity theft using passwords and other verification protocols, you need to do the same for your business.

Click here – Pointers On How to Choose Reasonable Mobile Phone Plans

One tactic may be assuring all purchase decisions go through a financial officer in your company. Another might be only allowing whatever financial institution your company works with to approve specific transactions. Consultation will help you determine where limitations should be, and how best to apply them.

Keeping Your Business More Safe
It’s difficult to totally eliminate what risks your business faces when it comes to financial fraud, however you can take steps. Know the most common types out there. Presently, three very common areas of financial crime you’ll want to be wary of include compliance issues that leave you open, embezzlement, and identity theft.

Categories Law