Has the slow introduction of blockchain in receivables finance caused fraud to go away?
No, it hasn’t gone away, fraud is still there. The process and structure put in place to access liquidity requires certain information like an invoice, so there is the opportunity for somebody who is either a criminal fraudster or, sometimes, sadly, legitimate businesses who have come into difficult cash flow situations and then started to abuse the system by introducing false invoices. For instance: let’s say that the business from ‘buyer X’ is expected next month so it doesn’t take much to change the date on the invoice from the 1st of April to the 1st of March. Its advancing forward in time an invoice but it no longer matches reality and is a “timing” fraud. The business has not transacted so it’s fraudulent because you’re asking for money on the base of an invoice which does not exist because goods have not actually shipped. It’s commonly a first toe-dipping exercise into the world of fraud.
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