Far higher than results from Europe, 62% of U.S. respondents felt that fraud had increased. 59% of U.S. lenders also thought client debtor or business failure had increased – again, much higher than their European counterparts.
This is particularly concerning, as many U.S. businesses and their employees have been cushioned by a huge government stimulus package. At some point this will need to be withdrawn. In a bid to bridge any potential new funding gaps, businesses might be tempted to start manipulating their receivables finance facilities. This is when lenders could see a spike in this fraudulent activity. Now, more than ever, lenders need to reduce their risk exposure through a proactive, technology-led strategy.
Leveraging Technology To Fight Fraud
By automating their processes, and through detailed trend analysis, receivables finance lenders can swiftly identify any indicators of fraudulent financial manipulation.
It helps to make smarter decisions. This is even more important where support has come in the form of loan payments deferral; which businesses have benefitted from over the course of the pandemic. These loans will eventually need to to be paid back. In this case, lenders will need detailed analysis to monitor the re-payments. The financial metrics that lenders are using will also need to be re-baselined.
Knowledge Is King
It is crucial to have a detailed understanding of your client’s financial circumstances to ensure the right lending decision is made. Data plays a significant role in this. However, with endless data sources available it can often result in information overload. We believe it is important that your systems present the right people with the right information at the right time.
By its very nature, the receivables finance model lends itself perfectly to supporting business resilience as global economies unlock and invoicing activity increases. Anti-fraud technology will enable the receivables finance industry to thrive and support economic recovery, even in times of adversity.