Public Sector Payment Fraud: An Alarming 95% of Agencies at Risk
A recent report by Government Technology Insider reveals that payment fraud is increasingly becoming a critical issue in the public sector, affecting an estimated 95% of agencies. Paymerang, a leading financial automation platform, provides accounts payable (AP) automation to public sector clients focused on reducing risks and security vulnerabilities.
“Payment fraud lurks in the shadows of every transaction. Implementing sophisticated systems and training your team to decipher fraudsters’ habits is necessary, especially when it comes to your organization’s financial integrity” said Sierre Lindgren, Paymerang’s Senior Fraud Analyst.
Local government agencies specifically face many challenges that they are often under-resourced to meet. This includes ransomware and malware attacks along with complex payments fraud and impersonation attempts. Government Technology Insider reported that the median loss for payment fraud at local agencies is $114K with more than 25% of losses being over $1 million.
Such attacks can shut down a city or town’s operations for days or even weeks and create critical vulnerabilities in a government’s abilities to serve the public.
The COVID-19 pandemic furthered the increase in fraud through abuses to pandemic-related relief programs. An estimated $163 billion in pandemic employment benefits were reportedly misspent or stolen according to The Washington Post.
Antiquated technology and reliance on significant amounts of paper-based documentation is a leading factor contributing to the vulnerabilities that government agencies face. Manual processes for handling payment requests and invoices, combined with a lack of advanced fraud detection mechanisms, can facilitate an environment in which fraud can readily occur, putting substantial amounts of taxpayer money at risk.
The complex approval hierarchies in municipal departments and regulatory requirements add to the struggle to remove bottlenecks from the disparate systems.
Paymerang serves public sector clients by providing enhanced security and reduced fraud risk through seamless automation of accounts payable processes. Financial automation that introduces stringent fraud detection, reduces manual processes, and eliminates paper checks significantly lowers an agency’s fraud risk and protects continuity of government services. Paymerang uses security measures to help stop hundreds of fraud attacks yearly using features like encrypted account data, Positive Pay, and multi-factor authentication.
To learn more about how AP automation can provide greater security and reduce your risk of fraud, schedule a demo here.