How to protect your startup from BEC email fraud

The hidden threat behind routine payments

Here's why founders and startups are prime targets for BEC attacks:

• You move fast. Startup culture prioritizes speed over verification. Attackers love to exploit urgency.
  
• You run lean. Fewer approval layers mean fewer checkpoints to catch fraudulent requests.
  
• You operate globally. Complex international payment flows create more opportunities for manipulation.
  
• You process valuable transactions. SMBs represent 70% of all BEC targets. There’s enough money to make attacks worthwhile, and SMBs have typically weaker defenses than enterprises.
  

70% of small and medium businesses face a weekly BEC attack probability. One successful attack averages six figures in losses. Yet 90% of these attacks are preventable with basic controls that cost nothing to implement.

How modern BEC attacks work

Forget what you think you know about cybercrime. BEC doesn't exploit technology; it exploits trust. No malware, no system breaches, just calculated manipulation of human psychology and business processes.

Modern BEC follows a three-phase pattern that unfolds over weeks:

1. Reconnaissance: Attackers monitor your communications, learning payment patterns, vendor relationships, and approval workflows. They study how you write, when you pay, who authorizes what.
   

1. Compromise: Phishing captures credentials, and 73.5% of BEC cases start here. One clicked link, one entered password, and attackers gain email access. They establish forwarding rules, create filters to hide their activity, and wait.
   

1. Execution: The attack strikes during routine transactions when your guard is lowest. Perfectly timed, contextually appropriate, devastatingly effective.
   

Four types of BEC attacks

1. Gift card scams

Your CEO, who is traveling sends an urgent request for a client gift. ‘Buy $2,000 in iTunes cards immediately, send codes via email.’ By the time you realize your CEO never uses iTunes for client gifts, the cards are drained and untraceable.

2. Invoice manipulation

Your legitimate vendor's email gets compromised. The next invoice arrives on schedule, looks identical, except that the bank account number has changed. In 2024, Hong Kong received 3,043 fraudulent wire transfers this way

3. CEO fraud

An email from your CEO reads, ‘Confidential acquisition underway. Wire $75,000 to escrow account by 3pm. Don't discuss with anyone, deal sensitive.’ The urgency, secrecy, and authority pressure staff to override normal protocols.

4. Payroll diversion

An employee emails HR requesting direct deposit changes. ‘New bank account needed due to account issues.’ Two pay cycles pass before the real employee asks why they haven't been paid.

How AI is changing email attacks

Singapore authorities issued a warning in March 2025: deepfake technology now enables real-time video impersonation during verification calls. That "CEO" on your video call might be AI-generated, their voice and appearance indistinguishable from genuine.

ChatGPT and similar tools craft context-perfect impersonation emails, match writing styles, reference past conversations, and use company-specific terminology. LinkedIn provides organizational intelligence, such as reporting structures, travel schedules, and vendor relationships, which are publicly available information.

As a result, conversation hijacking has increased 70% since 2022. Attackers insert themselves into existing email threads about legitimate transactions. The thread is real, the transaction is expected, only the payment destination has changed.

Red flags of BEC attacks

Your best defense isn't technology — it's awareness. Train every team member to spot these warning signs:

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90-day roadmap to protect your startup from BEC attacks

Transform your BEC defenses in three months with this implementation plan:

Week 1: Zero-cost quick wins

Enable Multi-Factor Authentication everywhere.

• MFA blocks 99% of account takeovers. You can do this for free with Google Workspace and Microsoft 365. Use authenticator apps, not SMS, as SIM swapping can bypass text-based codes.
  

Create ironclad callback verification rules:

• Never use phone numbers from suspicious emails
  
• Only call previously verified numbers from your records
  
• Document every verification with names, times, outcomes
  
• No exceptions, regardless of claimed urgency
  

Week 2-4: Foundation building

Deploy email authentication protocols. These three security measures verify that emails actually come from who they claim to be, countering 75% of spoofing attacks:

• Week 2: Implement SPF (Sender Policy Framework) records — these tell other email servers which systems are authorized to send email from your domain
  
• Week 3: Enable DKIM (DomainKeys Identified Mail) signing — this adds a digital signature to your emails proving they haven't been tampered with in transit
  
• Week 4: Start DMARC (Domain-based Message Authentication) in monitor mode — this instructs receiving servers what to do with suspicious emails and gives you visibility into who's sending email using your domain name
  
• A DIY setup costs nothing compared to an average of $50-200 per month if you use monitoring services that simplify the process.
  

Establish payment controls:

• Dual approval for all payments over a pre-defined threshold (e.g. $5,000)
  
• Segregation between payment approvers and processors
  
• Vendor change protocol requiring phone verification, written confirmation on letterhead, small test payment first
  

Month 2-3: Technology layer

Deploy AI-powered email security that can achieve remarkable accuracy:

• Detection rates approaching 99%
  
• Minimal false positives (1 per 4 million emails)
  
• Behavioral analysis catches what rules miss
  
• Cost: $2-10 per user monthly — fraction of potential losses
  

Launch phishing simulations:

• Baseline failure rate: 37.9% of employees click
  
• After 6 months: 4.7% failure rate
  
• 87% improvement through regular testing
  
• Cost: $3-8 per user monthly
  

What to do when a BEC attack happens

Speed is a crucial factor in recovery. The FBI's Recovery Asset Team achieves 66% success rate in freezing fraudulent transfers, but only within 72 hours. After that, money disappears into cryptocurrency or exits through jurisdictions with limited cooperation.

Follow the golden hour protocol

• STOP: Freeze all related transactions immediately. Don't process "corrections" or "updates."
  
• CALL: Contact your bank for immediate wire recall. Provide transaction details, receiving bank information, exact amounts and times.
  
• REPORT: File a report with your local authorities..
  

• US: FBI IC3 at ic3.gov
  
• SG: 24/7 ScamShield helpline at 1799
  
• HK: Anti-Deception Coordination Centre (ADCC) 24/7 hotline at 18222
  

• PRESERVE: Screenshot everything. Save emails, headers, logs. Don't delete anything, as keeping evidence helps recovery and prosecution.
  

Regulatory requirements you can’t ignore

Compliance isn't optional. While many BEC regulations target financial institutions directly, startups must understand their obligations when fraud occurs and how banking regulations affect their operations.

Singapore

The Monetary Authority's Technology Risk Management Guidelines require financial institutions to implement mandatory multi-factor authentication for fund transfers. This directly affects your startup, as banks will increasingly require you to use MFA for business banking.

When fraud occurs, you must report immediately to both the police and your bank to maximize recovery chances. Under the Personal Data Protection Act (PDPA), data breaches involving personal information can result in penalties up to $1 million, and this applies to all businesses, not just financial institutions.

The March 2025 Joint Advisory on AI-Enabled Scams from MAS, Singapore Police Force, and the Cyber Security Agency specifically requires businesses to establish protocols for verifying video calls and urgent fund transfers, given the rise in deepfake technology.

Hong Kong

Hong Kong's regulatory framework primarily governs banks through the HKMA Supervisory Policy Manual SPM TM-C-1, but startups face direct obligations under the Personal Data (Privacy) Ordinance. If your business experiences a data breach, you have 72 hours to notify affected individuals and the Privacy Commissioner.

While the Cyber Resilience Assessment Framework (C-RAF) targets financial institutions, it affects startups indirectly; your bank may require additional verification steps or documentation to comply with its obligations.

The Hong Kong Police Force's Anti-Deception Coordination Centre operates a 24/7 hotline (18222) specifically for businesses to report fraud attempts and has successfully intercepted HK$11.22 billion in crime proceeds since 2017.

United States

Under FinCEN Advisory FIN-2019-A005, any business that discovers BEC fraud involving $5,000 or more should work with their bank to file a Suspicious Activity Report (SAR). This applies whether the attempt succeeded or failed.

The Securities Exchange Act Section 13(b)(2)(B) creates internal control obligations that the SEC has specifically applied to BEC cases. In their 2018 Section 21(a) Report, the SEC investigated nine public companies that lost nearly $100 million to BEC, finding violations when their controls weren't "calibrated to the current risk environment." Even private startups planning to go public should establish these controls early.

How Aspire Protects Your Business

Aspire’s multi-layered defenses are designed to stop BEC attacks before they succeed:

AI-Powered anomaly detection

Our systems analyze transaction patterns in real-time, flagging unusual payment instructions before funds leave your account. Suspicious timing, amounts, or destinations trigger immediate holds for verification.

Account security

• Mandatory MFA for all sensitive activities
  
• Login risk scoring identifies suspicious access
  
• Proactive account takeover prevention
  
• Session intelligence tracks and blocks unauthorized access attempts
  

Payment safeguards

• Real-time alerts
  
• Built-in verification workflows for high-risk transactions
  
• Automatic holds on suspicious transfers for manual review
  
• Dual approval enforcement for transactions exceeding thresholds
  

Compliance and support

Our 24/7 fraud support team provides immediate assistance, while dedicated recovery specialists help victims navigate the complex process of fund retrieval.