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Insider fraud a real threat to small firms

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While all small-business owners should be protecting their firms with cyberliablity insurance already, a recent study conducted by Attachmate Corporation and Ponemon Institute presents another reason why such policies could be a good idea. The research unearthed that, on average, organizations fall victim to roughly one fraud incident per week, with many of these instances being caused by a member of the company.

"This data demonstrates the invisibility of employee actions across an enterprise," said Larry Ponemon, chairman and founder of Ponemon Institute. "While organizations may have policies and procedures to thwart insider fraud, it doesn't mean employees will remain compliant, particularly with the rise of Bring Your Own Device (BYOD) practices."

BYOD causing issues at many firms
Many small-business owners can boast positive experiences with 'bring your own device' policies, but despite their benefits, they can also serve as a detriment to firms. Forty-eight percent of respondents believe BYOD has resulted in a significant increase in fraud risk and 77 percent said that a failure to enable security protocols over edge devices creates a major concern for businesses. Small-firm owners who allow employees to use personal devices for business purposes must be sure that their staff will follow the necessary data security procedures to protect corporate data.

"Data security and insider threats continue to be a challenge for organizations, particularly as BYOD brings complexity to enterprise risk management," said Christine Meyers, director of enterprise fraud management solutions for Attachmate.

Businesses can never be too trusting of employees
According to the survey, only 44 percent of respondents said their company thinks of insider fraud prevention as a top security priority, but with 73 percent of firms reporting an employee's malfeasance has caused financial loss and possibly brand damage, companies need to ensure that they hold employees to a strict set of policies. Small-business owners also need to invest in technologies that allow the enterprise to be able to detect a data breach, because the study showed it takes nearly three months to first recognize insider fraud.

"With this research, we want to reiterate that organizations are not immune," said Meyers. "The threat of insider fraud is a growing risk that can result in tangible financial loss to businesses. And the longer an organization takes to address it, the more costly it can become."

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