System Support for Group-wide Treasury Management
Payment security and fraud prevention: there isn’t a company out there that is not concerned about these issues. How to make payments processing most secure? This is the question everyone is asking – probably including you – and it is being addressed at multiple levels. One of these levels is technology, i.e. the system support your TMS can provide when it comes to tackling payment security.
Payment security – where is your company most vulnerable?
Payment security is a complex and multi-facetted issue. Fraud schemes are manifold, potential angles of attack numerous, and prevention a diverse topic concerning multiple players, departments – and of course technology. So where do you get started? Let me answer that question with another question: where are you most vulnerable?
There are three crucial points where the security of your company can very easily get compromised. Let’s take a closer look at them.
- Payment approval processes
- Payment monitoring
- Payment transmission
Payment security – system support for payment approval
There are many things that can go wrong when a payment is to be approved before being transmitted to the bank. One seemingly simple, yet highly dangerous scenario is that of the same person who has created a payment also approving it. There’s nothing between them and that multi-million-dollar payment going to the wrong account – simply because there’s no one to double-check their actions. And by the time you do notice, it is probably too late to get your money back. The answer to this security loophole seems obvious: introduce at least one other person into the payment approval process.
There is no more secure way to do that than by using system support. A TMS that stipulates multiple approval levels (such as BELLIN’s Four-eyes Principle) goes a long way towards safeguarding your payments. If you want to go one step further, you introduce another device – splitting up the payment process and shifting the authorization to a different hardware. This makes it that much harder for anyone to manipulate the system. This approach is called 2-Factor Authentication – a very effective measure that should really be reflected in treasury management systems as well. One option is to work with 2FA via a mobile device, something that BELLIN has implemented with a feature in the mobile BELLIN Connect app. In combination with the BELLIN TMS, tm5, it can be made mandatory to use 2FA for every login and every payment approval.
Payment security – system support for monitoring payments
Even with a sound payment approval process, there’s a lot happening that you need to keep an eye on. For example, the ERP or HR system generates the wrong file, and as a consequence files cannot be read by the TMS. Or payment files cannot be transmitted because communication between your system and the bank breaks down. Or payment files are partially or fully rejected by the bank. Or you receive payment status reports from your bank too late or not at all. Or… There are many things that could go wrong and that you want to be aware of as quickly as possible.
It can be hard for a treasurer and their team to monitor all of this, and this is where system support by way of a treasury management system comes in again. tm5 for example works with an event calendar where users can subscribe to specific events (such as import errors, entered payments, pending user approval, rejected payments etc.). They’re then alerted – not just when an action has been successfully completed but more importantly when something appears to be amiss. You can go back, double-check and make sure everything is as it should be – that everything is secure. You benefit from a complete audit trail that documents all actions taken from import to sending a payment, including the respective users. After all, security is not just knowing that only users with the respective permissions can even be involved in the payment process, it also means that payment files are accurately and reliably transmitted to the banks – and that you know about it when they are not.
With treasury management being such a time-critical and dynamic discipline, this system support also needs to extend past your office walls and hours. One way to ensure you’re always alerted wherever you are, is by using a mobile app in connection with your TMS. The BELLIN Connect app in conjunction with tm5 for example allows you to receive push notifications on your mobile device, so you can be sure to know what’s happening wherever you are. Don’t lose sight of any payments and be the first to know if anything out of the ordinary happens. This will allow you to react even more timely and to stay on top of your payment security concerns.
Payment security – system support for payment transfer
But it is not just the payment approval and monitoring process that can leave companies vulnerable. Payment transmission to the bank is another crucial moment that – without the right system support – can leave ample opportunity for manipulation. To counteract any such manipulation attempts, a treasury management system should enable you to compare payment files when they are imported to the system and/or whenever a payment is approved. You can use algorithms in connection with hash procedures. The systems – both ERP system and treasury management system – calculate hash values – a checksum – that can compared and matched.
There are different algorithms that can be used here. tm5 for example supports the SHA-256, SHA-1, MD5 as well as CRC32 algorithms – with SHA-256 being the standard algorithm used for checksum comparisons. For you, this means better payment fraud prevention. You can easily spot if the payment has been changed after the payment file was created but before it has been transmitted to your TMS. Crucially, you can intervene before the payment leaves your company, potentially saving you a lot of money.
Payment security and fraud prevention are definitely top of mind for everyone. Good processes and workflows as well as awareness are crucial – but so is technology. Treasury management systems must be up to the task, and as treasury system providers it is our job to ensure your system is a secure as possible – now and with every new threat to come.