Veriff’s Fraud Industry Pulse Survey uncovers the true cost of payments fraud

by Chris Hooper, Global Director of Content, Veriff

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Fraud is hitting payments platforms hard in 2024. That’s the main takeaway from the Veriff Fraud Industry Pulse Survey 2024, in which we surveyed hundreds of senior decision-makers and fraud leaders from payments businesses across the US  in the year to April 2024 to find out how fraud is impacting their businesses. 

With respondents covering key sectors in the rapidly evolving payments ecosystem, such as compliance, digital fraud, risk, financial crime, customer authentication and more, this survey explores what keeps payments fraud professionals in the US awake at night – and the steps they are taking to protect their businesses.

Fraud is a growing problem for US decision-makers

Fraud is a major threat to payments businesses in the US digital economy. Almost 87% of respondents saw an increase in online fraud in the year, while just 1.19% said they experienced zero fraudulent identity fraud attempts. 

The vast majority of respondents have suffered at least some hit to their revenue because of fraud. For almost 90%, it caused a revenue hit of between 1% and 9%. In fact, just 6.96% of respondents said they had felt no impact on revenue from such criminal behaviour. 

The percentage figures are worth converting into dollars to highlight the extent of this problem. If a company has an annual revenue of $100 million, it could be losing up to $9 million a year from fraud.

These results aren’t surprising, and US payments leaders are far from alone: it’s a global problem. Veriff’s Identity Fraud Report 2024 found a 20% rise in overall fraud year-on-year since the previous report. 

Customers see the danger – and demand action

Across key sectors, customers are paying attention. Over 86% of payments decision-makers say their customers are now more demanding of robust fraud prevention capabilities. 

This speaks to the widespread nature of the growing danger from fraud and echoes the results of wider research. For example, the Veriff Fraud Index 2024 surveyed 1,000 end users or consumers across the US and Europe and found that 75% said they consider a company’s record on fraud prevention before signing up for a service. 

AI is a growing threat – but also an opportunity

Fraudsters have weaponised AI. According to our survey, almost 78% of payments decision-makers have seen an increase in the use of AI in fraudulent attacks over the past year. 

On the other hand, it is being used increasingly in defence: nearly 79% are already using AI and ML in fraud prevention. Decision-makers appreciate the benefits of AI in the fight against fraud, from identifying fraud patterns (69.38%) to automating the IDV process for more robust checks (57.85%). 

Fraud teams are fighting back 

Decision-makers are taking steps to secure their organisations. Less than 1% say they’re unprepared and face considerable attack risk. At the other end of the scale, about a third (32.21%) believe they are prepared and face no attack risk. 

However, the data suggests that two-thirds of US decision-makers think their firms could be doing more. Most respondents (56.06%) say they are somewhat prepared and face little risk of attack, while a further 10.34% say they are somewhat unprepared and face quite a few risks of attack. 

Still, there is clear momentum for action, particularly when it comes to technology. US payments decision-makers see the benefits of AI as a tool to protect their businesses and customers. Regarding identity verification (IDV) and biometrics, about 96% plan to increase either or both in the next year. 

The survey presents some worrying findings, highlighting a growing danger to payments businesses from online criminals. However, the results are encouraging, showing a burgeoning awareness of the danger and a desire to address the problem using AI, IDV and biometrics. 

Download the full survey report here

Article by Veriff

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