#USA #New York #Invoice Fraud #AI Payments #Cass Information Systems

Understanding the Rise of Invoice Fraud in Business

In the ever-evolving landscape of business, invoice fraud has become a pressing issue that affects companies of all sizes. During a recent interview on Today's Marketplace, Martin Resch, CEO of Cass Information Systems, shed light on this critical concern. With a staggering 80% of businesses reporting experiences of invoice fraud that have impacted their financial outcomes, the urgency to address and combat this type of fraud is clear.

The Mechanism Behind Invoice Processing

Resch explained that the accounts payable (AP) process typically functions through two primary methods: via a purchase order (PO) or through the arrival of an invoice for goods and services. While using a PO offers inherent protections, many invoices do not fall under this category, creating a gap that can be exploited by fraudsters. This is where Cass Information Systems steps in.

"For invoices that can't be tied to a purchase order, a different set of controls is necessary, and that's our expertise," Resch stated, highlighting Cass's unique capability in handling millions of non-PO invoices. These include various contract-based bills such as utility and freight invoices. The company employs advanced control mechanisms powered by AI to ensure that each invoice processed is legitimate and accurate.

AI's Role in Combatting Fraud

The integration of artificial intelligence (AI) into financial processing is not just a trend but a necessity in today’s fast-paced business environment. Resch emphasized the importance of robust controls in invoice management, noting that stakes are high and that having a competent financial institution by your side can be a company's best defense against fraud. The use of AI not only streamlines processes but also adds a layer of security that is crucial for protecting company assets.

Anthony R. Hendrickson, PH.D., Dean of the Heider College of Business at Creighton University, also weighed in during the discussion. He highlighted that as students are trained for future roles in finance, they must acquire technical skills in addition to traditional finance knowledge. In particular, he noted the importance of learning about FinTech innovations, including blockchain and machine learning, which are reshaping the landscape of financial transactions.

"As we prepare students for firms like Cass, we recognize that they will need to master both financial acumen and technical proficiencies," Hendrickson remarked.

The Broader Impact of Invoice Fraud

With invoice fraud becoming increasingly sophisticated, it is critical for businesses to implement comprehensive control systems. Resch warned that the situation may become more dire if robust measures are not adopted. As he shared during the interview, “Having a firm that understands the nuances of payment processing and fraud detection is essential for any business looking to safeguard its finances.”

TMP's interviews focus on providing essential business insights and solutions from industry leaders and academic experts. In this regard, Resch expressed gratitude for the opportunity to share his insights, stating, “Today's Marketplace serves as a valuable resource for busy executives seeking timely updates about industry challenges and solutions directly from influential figures in the field.”

Conclusion

In summary, as invoice fraud continues to plague businesses, leveraging technology like AI, alongside building a strong understanding of financial controls, is paramount. Companies must not only react to these issues as they arise but proactively integrate robust systems that will secure their operations against potential threats. Cass Information Systems, with its keen focus on innovation and security, demonstrates a pathway to navigating the complexities of modern finance successfully. The insights shared by Resch and Hendrickson are a reminder that preparation in both education and industry practices is vital for the future workforce and businesses alike.