Daniel W. Draz, M.S.,CFE has 28 years of successful fraud experience exclusively in the private sector. Specialties include financial crime, ethics, governance, risk, compliance, audit, regulatory, and fraud management, especially investigation, training, prevention, detection, consulting and mitigation. Fraud Solutions is a boutique management services firm providing a customized portfolio of: fraud risk management consulting, fraud risk strategies, fraud analytics & research, GRC, ethics, and fraud training services to clients around the globe.
More specifically, Fraud Solutions’ mission is to provide a comprehensive suite of services to companies which helps them identify, combat, and reduce the amount of fraud committed against their business, products, and services. These services increase the return on investment (ROI) and profitability to the bottom line.
BusinessInterviews.com: What inspired you to launch your own business?
Daniel: The inspiration for launching Fraud Solutions was the unique opportunity to provide a more customized service level, competitive price point, and superior management product than currently being offered by larger consulting firms. More specifically, I found that businesses around the world have a real need for insightful, results driven, fraud risk management and consulting services that do not cost them upwards of $500,000 simply to start an engagement.
BusinessInterviews.com: What are some of the key ways that fraud has changed over the last decade?
Daniel: Fraud is definitely more digital these days and has evolved with technological advances. As technology grows, so does the amount of fraud being committed against it. Some people are fond of saying that the “Internet solves everything.” That’s certainly true. It has made conducting business easier in many respects. However, technology is clearly a “double edged sword,” as many of the same things that make the Internet great also expose businesses and individuals to significant risk just by having an Internet connection.
Another change involves the global landscape. Fraud has become significantly more global in nature. The nefarious individuals targeting your company often live in a world far, far away.
BusinessInterviews.com: Are there any types of businesses that are more prone to fraud than others? What can businesses do to reduce the impact and risk exposure to fraud?
Daniel: All businesses are prone to both internal and external fraud. They possess proprietary data, intellectual property (IP), customers’ personally identifiable information (PII), and revenues, which make them attractive targets to external thieves. Fraud can also come from the inside of any business as well. While fraud is definitely more global now, and the threat from global organized crime rings is significant, companies cannot ignore the internal fraud threat from employees. Employees pose a significant fraud risk. They understand the system, the controls, and technological processes in place to prevent it. A moderate sized embezzlement can easily result in $1,000,000 in losses.
As for fraud prevention, nothing a company does is completely foolproof. There are simply too many variables involved in doing business. However, there are many steps that businesses can take to reduce their fraud risk and exposure. Perhaps the most important step involves a thorough fraud risk assessment, which determines significant business vulnerabilities, prioritizes them, and creates appropriate risk mitigation strategies.
BusinessInterviews.com: What are some of the most common forms of fraud you see committed and how can they be avoided?
Daniel: That’s a really tough question, as there are as many different types of fraud as there are different types of businesses. Generally speaking, however, in the business realm, large scale data breaches are still the 800 pound gorilla in the room. That means protecting customer data, privacy, and PII is paramount. There are also frauds which target proprietary business information, IP, revenue streams, and business products/services. Prevention of these frauds is where we concentrate the majority of our anti-fraud efforts. We work with companies to improve their fraud risk management efforts, decrease their vulnerabilities, and reduce major fraud losses.
For consumers, the prevalent issue is still ID theft. False IRS tax returns submitted on a customer’s behalf are an emerging trend. Preventing individual victimization centers around awareness, prevention, privacy, and securing your PII both in person and online.
BusinessInterviews.com: What are some trends in your industry that you’re excited about or think that our readers should be paying attention to?
Daniel: Definitely social media! I don’t know if it’s more exciting or scary, but readers should definitely be paying attention to their social media usage. Social media and social media apps are all the rage these days, but what most businesses don’t realize is that IP theft, proprietary data theft, and industrial espionage committed via social media apps is prevalent. There are organized criminal entities, foreign governments, hacktivists, and competitive intelligence firms mining social media for information about a company’s proprietary information and IP. This is what’s known as industrial espionage. While a percentage of industrial espionage cases are “state sponsored,” there are a significant amount that aren’t as companies try to increase their competitive edge in the marketplace. The bottom line is that these entities are looking to social media to exploit your business information. Remember that the first to market usually wins!
The most disturbing trend in social media usage is how easy it can be to obtain business information. Very few companies really stop to think about what their employees are doing while using social media. Further, many don’t have policies, processes, procedures, or training in place to educate employees about the need to protect proprietary information or IP while using social media apps. What your employees are saying, or doing, on social media is a bigger business risk than most people are aware of.
BusinessInterviews.com: Congratulations on being named a Fellow of the Governance & Accountability Institute. What does this honor mean for both you and your company?
Daniel: Thank you. I’m exceptionally proud of this accomplishment. What it means is that I’m being recognized by others in the Governance, Risk and Compliance (GRC) field as a thought leader and innovator in the anti-fraud space. This fellowship provides me with a larger platform to communicate the fraud risk prevention message globally. It also further establishes Fraud Solutions as a significant choice for companies needing competitively priced fraud risk management consulting, research and training services over larger, more expensive firms with “budget busting” price tags.