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Entrepreneurs from all fields often wonder how to make their business more secure. For them, “how to reduce the risk of fraud?” is a recurring question and a constant concern. Is there a really reliable way to secure your data and transactions?

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Blockchain technology, among its various applications, currently stands out as a possible solution to this problem. Check out the main types of company fraud here and find out how this innovation can be an important ally in your fight against them.

What are the main types of fraud in companies?

According to a survey on business fraud in Brazil – made by American research firm Kroll and published by Exame magazine in early 2018 – 74% of the organizations said to have suffered at least one fraud episode in the 12 months prior to the survey.

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For the KPMG consultancy, in turn, also in data conveyed by Exame, the misappropriation of company resources, such as inventory theft, is the main occurrence in organizations, accounting for 56% of cases. Another type of fraud is information leakage, which is often related to the action of some employee of the company, who has access to privileged data and takes advantage of his position to provide it to competitors in exchange for money or influence, for example.

Other recurring frauds are theft, sabotage, voluntary waste, misappropriation and evasion.

How can blockchain help prevent fraud?

In short, blockchain can be described as a public database in which digital files of any format or origin can be registered, such as a general ledger. Its particularity, however, is that it is decentralized, that is, it is not stored in only one place, but distributed among several computers, the “nodes” of the network.

In addition, blockchain works from three fundamental characteristics:

  • immutability: the information registered cannot be removed or modified;
  • auditability: the ability to verify all the information that is registered;
  • timstamp: the conference of the exact time and date in which information was recorded.

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How, then, in practice, can this technology help reduce the possibility of enterprise fraud? In at least four ways: by guaranteeing authenticity, decentralizing storage, providing security through encryption and tracking. See below:

1. Guarantee of authenticity

Given those characteristics, blockchain makes it possible to records the authenticity of documents, intellectual property works and contract signatures, for example.

Each of these documents will have a unique identifying number, known as a hash, that functions as a kind of digital DNA. To generate it, an algorithm is used to calculate the digital signature of the document. If the original file is modified, the hash generated by the process will not be the same, so that the business owner will know that there was a fraud in that document.

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In addition, documents stored in the blockchain cannot be removed or changed, ensuring that the information recorded is authentic.

2. Decentralized storage

As mentioned above, blockchain is a decentralized system, that is, in it, the information is not concentrated in a single point of vulnerability. This means that it is practically impossible to change something registered in the blockchain, since, unlike normal platforms, there is not only a single database to be modified, but several copies on different servers.

For the same reason, hacking attacks also become much more difficult to execute.

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3. Security through encryption

Another important point of blockchain technology is that the data is stored in it in a pseudonymized way. Thus, even in the remote possibility that the network is the victim of a successful attack, hackers will not be able to access the documents and files registered on it.

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4. Tracking

As each record in the blockchain is accompanied by the date and time it was made (the so-called timestamp), the information is kept in a linear and organized way, making it easy to verify and audit the company’s internal processes.

Finally, through the creation of verified identities, blockchain also helps to prove that a person is who he says he is, making it possible to see which acts are being practiced with the company computer, who is responsible for a given signature or access, and so on.

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Conclusion

Blockchain can, therefore, be used as an important tool in the fight against fraud, making companies more secure in their routine.

If you liked this content, don’t forget to share it in your social media and to tag your friends and co-workers! Want to learn more about how to implement blockchain to prevent fraud in your company? Then book a call with our sales team right now!