why fraud prevention is becoming an increasingly important subject for SMB's?
None Too Small to Be a TargetBusinesses of all sizes depend on banks and with the
financial landscape experiencing significant transformation in the wake of
advancements in digital technologies, changes are occurring in these
relationships as well. Digital transformation is paramount for both sides,
affecting everything from business transactions to convenience. In the end, it
all comes down to trust.
Where Digital Is Small and Slow
Banks have, overall, been making significant investments in
the development of their digital capabilities but there is, however, a marked
difference in dedication between big banks and smaller, community banks.
Research points to community banks having a much lower level of interest in
digital transformation, which means they also invest less resources in the
development and implementation of digital technologies.
The Strain of the (Digital) Service: SMBs and Community Banks
This in turn affects businesses these banks work with, especially small and medium ones, who depend on them for their everyday operation. The relationship between community banks and SMBs is therefore suffering, with SMBs desiring the various benefits digital transformation can provide.

Examples of said benefits include digital invoicing, integrated payables and payroll services - all of which help streamline various business and commerce activities, make transactions easier while maintaining their reliability, and especially help reduce paperwork which can strangle a small business. Unfortunately, reports indicate that these features are often very low on community banks' priority lists, straining the relationship between SMBs and their banks.
Fraud Comes for the Small Ones, Too
Fraud prevention is also very high on the list of services, therefore SMBs expect improvements from their banks and credit unions, and rightly so. Fraud doesn't just mean money lost for the SMBs: it can impede workflow or even completely stall your business; customers may lose trust in your business; and there is also the risk of legal liability.
This practice, known as "phishing", can cause
severe data breaches and incur significant losses to a business. Phishing attempts
occur at almost all levels and one of the gravest mistakes a small or medium
business can commit is to believe themselves to be "too small to be
interesting" to a phisher, while actually it is exactly this attitude that
makes them highly attractive targets for fraudsters.
Never Overpay
Another fraud small and medium businesses are frequently subjected to is overpayment scams, where a client will approach them remotely to purchase their goods or services.
The client will then pay more than the sum
that was originally agreed upon and later claim they've realized their mistake
and request a refund. However, since the account that the client used was
fraudulent, the business loses both the money and the goods or services they
provided.
Suspicious Supplies
There is also the matter of office supplies: fraudsters pretending to be suppliers of stationery or other types of office supplies providers and offering a business either a free gift or a free sample of their merchandise.
This is done to acquire the contact information of an SMB employee and then use the information to fake an invoice the fraudsters will then send to the SMB, often receiving payment from the business before any suspicions arise.
But fraud can come even from those SMBs rely upon the most: banks themselves. One of the most notable cases of banks committing fraud against their customers is the scandal surrounding the Halifax Bank of Scotland which specifically targeted small businesses, imposing debt on them only to strip them of all assets once the businesses were unable to pay.

The case of HBOS makes a significant point about the necessity of investigating every fraud claim: several businesses had complained about HBOS practices and there were suspicions that there was a clear and malicious intent involved, but it took the regulatory authorities a very long time to even consider these reports as meriting investigation.
SMB Security Essential
With online fraud on the rise as a result of the advent of digital transformation, banks have been making strides in developing and adopting new technologies and features to detect and prevent fraudulent behavior. And as the matter of HBOS shows, it is also vital that banks be subjected to the same scrutiny.
Machine learning and behavioral analytics are set to provide stronger, faster and reliable methods for detecting frauds in progress, while biometrics are expected to provide a way to stop fraudsters from making use of stolen devices or cards. All these developments will clearly be a boon to SMBs, ensuring greater security and unimpeded business.