By Bill Price, CFO, MineralTree
Are you still paying bills the old fashioned way by writing checks and sifting through mounds of paperwork? Do you realize this method actually increases your financial vulnerability to fraud, cyber-attacks and identity theft?
Did you know, unlike individual bank accounts, your business bank account is not protected by FDIC insurance? Designed to protect consumers from fraud, FDIC insurance is not there for you—the business owner—should a cyber criminal or untrustworthy employee attempt to drain funds from your business account.
Moving to electronic payments can go a long way to reducing these risks – eliminating the possibility that checks are stolen, or fall into the wrong hands along the way. With the right systems and best practices you have greater control over the process and can ensure that you are protected.
Here are five questions to ask yourself, and recommendations to help ensure you’re protecting your business bank account while banking online.
1) How susceptible is my business against cyber-attacks?
A 2012 survey by the National CyberSecurity Alliance and Symantec found that 83 percent of small businesses don’t believe they are a target for cyber-attacks. Wrong. According to The National Small Business Association, 40 percent of small businesses have been victims of cyber attacks – costing an average of $7,000 per breach. Upping your commitment to those best practices – outlined below – should be job #1.
2) How easy is it for my online billpay account to be hacked?
Easier than you think. Bank bill payment solutions allow you to complete payments with just a user name and password. What happens if that information is compromised? To thwart cyber-attacks, you should have a two-step out-of-band authentication requirement set up for your accounts. This added layer of protection sends a single-use code to your phone or email for you to enter after you input your login credentials – an extra step to authenticate users and ensure your account is protected. This drastically reduces the risk of fraud, as it’s pretty unlikely a cyber thief who has stolen your log-in credentials also happened to steal your cell phone or computer.
3) Is the person who sets up payments at my company different from the person who approves payments?
With limited resources, it’s sometimes difficult to build in controls. However, when it comes to minimizing fraud and account takeover, segregating duties is the easiest way for you to protect your cash. Have a different individual create payments from the one approving such financial transactions.
4) How do I secure my mobile and online payment solutions?
Mobile devices increase mobility and ease of use, but they also are subject to theft and hacking. Make sure your payment system only accepts transactions from recognized, registered devices. It’s also smart to set up a location-aware system that operates only within a defined geographical region, making it much harder for your devices to be compromised by foreign or international thieves.
5) What other measures can my bank help me with to protect my online payment processing?
Your bank should be your trusted partner to ensure your payment processing is secure. In addition to two-factor authentication, talk with your banking relationship manager about additional security practices and protocols you can employ, such as transaction verification, which ensures the accuracy of transaction content. Transaction monitoring also continually monitors transaction activity, and automatically alerts you when something is out of the ordinary.
With a 42 percent increase in cyber-attacks on companies with fewer than 250 employees in 2013 (according to Symantec), there’s really no better time to take a look at what you’re doing to protect your business bank account. Exploring these questions and aligning your processes and protocols for account settlement with the tips above can close the gaps in security—and let you focus on the rest of your business.
About the Author:
Bill Price is CFO at MineralTree, the business payments company. MineralTree partners with banks to make payments simpler and safer for businesses of all sizes.