Building a Fraud-Ready Corporate Treasury Team
Written By
Andrew Parker
EVP, Head of Global Treasury Management
The risk of financial fraud is nothing new for treasury teams, but modern tactics have become faster, more sophisticated and more aggressive. Today, treasury fraud attempts are often targeted, automated and powered by artificial intelligence (AI).
Combating advanced attacks requires a different approach. Fraud readiness is no longer a simple compliance exercise. It has become a strategic priority that requires strong controls combined with continuous staff education, clearly defined procedures and a culture of vigilance.
Corporate Treasury Teams Are Prime Targets
Corporate treasury teams often manage large account balances, control payment authorizations and regularly interact with executives, banking partners and vendors. This makes them prime targets for fraudsters who know that one rushed approval or compromised credential can open the door to significant funds.
The stakes are high, and when detection lags, consequences can escalate quickly. Not only do chances for recovery diminish as time goes by, but operational disruptions and reputational damage also tend to increase, potentially creating issues that linger for years.
Core Fraud Controls Every Corporate Treasury Team Needs
Prevention is the first layer of treasury risk management. Most banks offer a suite of fraud prevention tools that help control how payments are initiated, approved and released. Regardless of size, all treasury teams can benefit from using these tools as the foundation for fraud prevention.
Positive Pay
Positive Pay matches issued checks against a company-provided file. Any discrepancies in check number, amount or payee create a flag for review. This is typically very effective for reducing check fraud and is a baseline for strong fraud controls in treasury management.
ACH Blocks and Filters
ACH blocks prevent unauthorized electronic debits from posting to an account, while ACH filters allow only preapproved originators to debit funds. Both are critical tools for effective electronic payment fraud prevention.
Dual Approval and Segregation of Duties
Dual approval workflows and segregation of duties help ensure that no single person has end-to-end control over initiating and approving payments. This may help reduce the opportunity for both internal fraud and external manipulation. While each of these tools creates barriers, they aren’t sufficient on their own. Controls can block unauthorized transactions, but they can’t prevent a team member from inadvertently weakening the process.
The Human Factor: Training as Fraud Control
Many fraud attempts are designed specifically to exploit human behavior. They often use urgency, authority or familiarity to pressure employees into bypassing established procedures. This may come in the form of a legitimate-looking vendor change request, a spoof email claiming to be from the CEO or a phone call that pressures a team member to act quickly.
Ongoing training and frequent treasury fraud awareness updates may help prevent your team members from unintentionally becoming the weak link. Consistent reinforcement shortens response times and may help reduce losses. It also supports broader fraud prevention best practices across the organization.
Training should focus on practical scenarios such as:
- Recognizing attempts to compromise business email
- Using independent channels to verify vendor payment change requests
- Verbally confirming executive wire requests
- Following established procedures regardless of time pressures
Make sure all team members know how to handle unusual requests and give explicit permission to slow down and request additional verification, even when someone is pushing hard for speed.
Give extra attention to new hires and team members changing roles. Criminals love to target treasury employees who are new to the process and eager to please. Ensure fraud awareness is a part of every onboarding and is revisited each time someone takes on new payment responsibilities.
AI, Automation and the Changing Fraud Threat Landscape
Artificial intelligence has lowered the barrier to entry for fraud. It now takes minutes to draft extremely realistic phishing messages, replicate writing styles and generate convincing spoofed communications. Some attacks succeed by using voice cloning or pulling highly personal details from public sources.
Once they’ve mastered the format, automations allow scammers to quickly scale their efforts, targeting hundreds or even thousands of organizations with personalized messaging. The pure volume increases their chances of success.
This shift changes the dynamic. Attacks are no longer manual, isolated incidents. Instead, they’re systematic, adaptive and persistent. And this is exactly why static controls and once-a-year trainings are no longer sufficient. Treasury fraud awareness must be treated as an ongoing discipline, with regular updates as new tactics emerge.
Building a Culture of Fraud Awareness
Teams that openly discuss fraud scenarios, reinforce the importance of verification procedures and create clear escalation paths are often better at catching threats before they lead to losses.
A strong culture of fraud awareness encourages healthy skepticism. Treasury leadership sets the tone by encouraging team members to ask questions or escalate concerns without fear of criticism for creating delays. All employees must know exactly who to contact if something looks wrong and feel empowered to stick to protocols, even under executive pressure.
Responding Appropriately to Suspected Fraud
An incident may occur despite having powerful tools, protocols and training programs. If this happens, the right response can make a significant difference. All treasury teams should have a predefined procedure that includes knowing:
1. Who to notify and how to communicate internally
2. How to contact your bank
3. What documents to gather
4. How to preserve evidence
Remember that speed matters. The faster you notify your bank, the greater the chance of recovering funds or stopping a pending transaction. A treasury management specialist who understands your account structure and payment patterns may also be able to move faster and more effectively. Establish this relationship early on, instead of waiting for a crisis to occur.
The Bottom Line
A strong defense requires both people and processes. Treasury teams that rely solely on tools without investing in training and procedures are more vulnerable than those that take a comprehensive approach.
The strongest defenses combine robust internal controls, continuous education and a culture that prioritizes adherence to procedures.
Working closely with a treasury management specialist allows you to stay informed about emerging threats and proactively deploy the right controls. This helps ensure treasury teams are prepared to recognize and respond to fraud attempts before damage occurs. Reach out to a Banc of California Treasury Relationship Manager to learn more.
CONNECT WITH A RELATIONSHIP MANAGER
COMPLETE THIS FORM OR CALL
877-770-BANC (2262)