Public Sector's Playbook for Payment Fraud Protection

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Public Sector’s Playbook for
Payment Fraud Protection

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• Introductions
• Introduction to Payment Fraud
• Understanding what’s at stake
• Best Practices and recommendations
• Q&A
Agenda

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Introductions
Joseph Daniels
Chief Information Officer,
IllinoisState Treasurer
Ashlee Hartman
Executive Director, Public Sector
Kyriba

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What is Payment Fraud?

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“We don’t have a problem with
payment fraud.”

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FRAUD PROFILE
Willacy County, Texas
Loss: $980K
Fraudster logged in using
bank portal credentials
Transferred funds from
payroll account
½ recovered

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FRAUD PROFILE
State of Arizona
(Dept of Economic Security)
Loss: $4.4B
Unemployment Claims
Technology not in place to
detect suspicious requests
or overseas bank accounts

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FRAUD PROFILE
Govt of DC
Loss: $700K
Vendor impersonation
Communicated new Bank
Account Info
$0 recovered

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FRAUD PROFILE
Galveston County, Texas
Loss: $525M
Vendor impersonation
Requested to be paid
electronically
$0 recovered

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FRAUD PROFILE
Cabarrus Co., NC
Loss: $2.5M
Vendor impersonation
“Real” vendor notified
county 2 months after
fraudulent payments made
$800K recovered

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“We already have internal
safeguards in place.”

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“We have cybersecurity insurance….
Or the bank will cover me.”

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“Our team doesn’t handle payments
or that many payments.”

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“The Cloud isn’t safe.”

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• Relying on internal safeguards alone
• Payments from various agencies; no final validation process in place
• Ability to execute high-dollar payments with a single approval
• Payment files can be opened and modified
• No automated detection for duplicate and unusual payments
• Security measures not in place: Multi-factor authentication, IP Filtering, Single Sign-on
• Payments backup documents stored
in a different system than payment approvals
• Lack of real-time visibility into all payments
Scenarios Ripe for Payment Fraud

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What is at stake?
• Loss of funds
• Reputational risk
• Unfavorable press
• High risk for banks

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“We don’t have the budget for
technology solutions.”

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How can your Treasury protect themselves?
Treasurers should leverage technology as proactive weapons
against payment fraud instead of reacting to breaches.
As stewards of the constituent funds, Treasury must
assume cybersecurity responsibilities for payments.
This requires collaboration with IT.
There is no substitute for educating employees about
payment fraud and other cyber risks.
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Leveraging
Payments
Technologies
Collaboration &
Responsibility
Secure
Payments
Workforce
Education
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3
2
1
3 2

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The solution to address payment fraud
doesn’t have to be complicated.

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What questions do you have?
Thank you for your time.