How companies in the agribusiness sector can mitigate cybercrime and fraud

Schemes, scams, and fraud come in many forms

Modern-day fraudsters employ a variety of tactics to target businesses. Some, like business email compromise and deepfakes, have emerged relatively recently alongside new technologies. Others, like check fraud, are hundreds of years old.

Of the business leaders surveyed by KeyBank who reported experiencing issues with cybersecurity or fraud, the most common incidents were phishing/email spoofing, cited by 33% of respondents, followed by data corruption (32%). Roughly one quarter had been victims of business-related identity theft, 23% experienced check fraud, and 21% each reported financial statement fraud and ransomware attacks.

Which forms of fraud a business may be most susceptible to depends on a variety of factors. For example, small businesses that do not engage in a daily account reconciliation process are more vulnerable than large companies with automated systems in place. But it only takes one mistake or lapse in judgment to create an opportunity for fraudsters: for example, an employee bringing home their work laptop and using it on an unsecured personal network, enabling cybercriminals to install ransomware.

What makes agribusiness a vulnerable target

Unfortunately, cybersecurity breaches and fraud are common occurrences in the agribusiness sector. Business email compromise (where an employee clicks on a link in a fraudulent email or message), and check or ACH fraud are two of the most frequent incidents that KeyBank experts observe among agribusiness firms.

While no industry or company is immune to fraud, some characteristics of companies in the agricultural space can increase exposure to certain threats. For example, businesses that grow crops or other agricultural products tend to have seasonal cash flow fluctuations. A company that distributes plants and flowers to nurseries and home improvement retailers might be relying on a business line of credit during the colder months, then accumulate large amounts of cash when receivables are collected in the spring and summer months. Similarly, a potato farm might have a surplus of cash due to shifts in supply and demand, leading to an increase in commodity prices. These fluctuations can result in a higher potential for losses if fraud occurs, simply because criminals may strike when there’s more cash to steal.

In addition, harvest season is a busy time for agriculture production firms. Particularly for smaller operations, harvest time means all hands on deck, and that can increase risk exposure. If everyone, including the team members who manage payments and account reconciliation, is out in the field picking apples or cherries, a fraudulent transaction or bogus email link may be overlooked. Bad actors committing check or ACH fraud often start with small transactions, knowing that low dollar amounts are less likely to be scrutinized.

What you can do to help protect your business

For any business in this day and age, a fraud or cybersecurity incident is less a matter of if than when. But businesses aren’t defenseless, and banks offer a variety of services and solutions to help protect against fraud and cybersecurity threats. These offerings include tools for verifying payment recipients and amounts to identify potentially fraudulent transactions.

Businesses need to work closely with banking advisors who understand their companies’ needs and challenges, especially when it comes to cybersecurity and fraud protection. Your bank relationship manager and payment advisor can help you identify the solutions that make sense for your business and in the context of the resources you have available.

The field of cybersecurity and fraud prevention is constantly evolving, with advances in technology creating fresh opportunities for thieves and scammers to exploit vulnerabilities, as well as new ways for businesses to protect themselves.