Compliance » The Hidden Pitfalls of Remote Work for Risk and Compliance Officers

The Hidden Pitfalls of Remote Work for Risk and Compliance Officers

The Hidden Pitfalls of Remote Work for Risk and Compliance Officers

February 6, 2024

The COVID-19 pandemic reshaped the work landscape, ushering in a lasting era of remote and hybrid work. While this flexibility brought benefits like improved work-life balance and expanded recruiting options, it also introduced new compliance challenges and exacerbated existing risks, according to an article by Navex.

One prominent issue is the “lack of line-of-sight,” a term referring to the diminished ability of leaders to observe and manage their teams in a remote setting. This absence can decrease the ease of detecting fraudulent activities. Fraud, in particular, has seen a surge in opportunities due to the elimination of traditional controls associated with in-person work environments.

Network security has become infinitely more complex in remote and hybrid work settings. Maintaining access control, utilizing virtual private networks, robust firewalls, and multi-factor authentication have become challenging as organizations strive to balance business agility and security.

Fraudsters have adapted to exploit the remote work environment, with Business Email Compromise (BEC) schemes evolving into sophisticated “invoicing schemes.” These schemes involve impersonating vendors and manipulating payment instructions, causing financial losses.

The remote work environment amplifies the opportunity for fraudsters, as they can exploit their positions of trust with less fear of detection. Traditional controls, such as physical oversight, are replaced by technology tools, but the lack of a “neighborhood watch” phenomenon increases the risk.

Training and professional certification fraud is another concern, with remote work decreasing the likelihood of discovery. Falsifying education or compliance training can have serious consequences for individuals and organizations.

Confidential reporting has reached an all-time high, with employees using reporting channels as a lifeline for personal struggles. The rise in mental health-related reports underscores the need for organizations to allocate sufficient resources for timely assessments and investigations.

The shift to remote work has also impacted investigations, with in-person interviews and record reviews becoming less common. While remote investigations are more efficient, they pose challenges in detecting physical cues and conducting admission-seeking interviews.

Looking ahead to 2024, progressive organizations are expected to proactively address emerging fraud risks, red flags signaling ethical erosion, and increased mental health issues. Leadership will play a crucial role in re-engaging the remote workforce and fostering a safe and ethical workplace to prevent future instances of fraud and misconduct.

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