January 2024 – Trustpair publishes its latest US Fraud Report. Trends, numbers, insights… This 2024 report outlines how US companies are facing fraud threats. Crafted with Cint, this report was created with Baptiste Collot, Trustpair CEO, and Lee-Ann Perkins, Assistant Treasurer, and NACHA advisory board member. Download it right now!
Cyber fraud escalation: a wake-up call for U.S. businesses
2023 has seen a notable rise in cyber fraud, deeply affecting American companies. An overwhelming 83% of businesses experienced cyber fraud, highlighting a critical shift from isolated, manual fraud attempts to a more systematic, technologically advanced approach. This evolution presents a new challenge for financial executives: adapting to the sophisticated landscape of digital deception.
As fraud becomes more and more cyber, manual prevention methods get less and less effective: unfortunately, only 28% of US companies use fraud detection software as a way to fight payment fraud. Businesses still widely rely on manual processes like human callbakcs and email verification. These defenses can hardly put up with sophisticated schemes carried out by professional fraudsters. US corporates seem to have that in mind: 56% of companies have seen a budget increase when it comes to fraud prevention in the last 12 months. A sign that shows that 2023 may have been the wake-up call companies needed.
Navigating the cyber threat: the top cyber fraud methods in 2023
The most prevalent methods of cyber fraud include text messages and fake websites, used by 50% and 48% of fraudsters, respectively. Scammers execute highly convincing phishing schemes, leveraging the power of AI to craft authentic-looking messages and websites. We’re far from homemade phishing emails with grammar mistakes and dodgy designs. This new digital sophistication makes fraud harder to detect and prevent.
Wire transfer scams and vendor fraud are at the forefront, with 53% and 47% of companies respectively falling victim. The preference for wire transfer fraud isn’t surprising given its prevalence in business transactions. However, the shift from traditional paper checks to electronic payments has opened new avenues for fraud. The introduction of vast amounts of new vendor data into company systems creates opportunities for fraudsters if not monitored effectively.
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The imperative shift to technology-driven fraud prevention
This surge in cyber fraud calls for a strategic response from U.S. companies. Traditional methods of fraud prevention are proving inadequate against these advanced digital threats. The need for robust, technology-driven solutions is more pressing than ever. Financial executives must prioritize the integration of sophisticated fraud detection and prevention systems to safeguard their companies in this evolving landscape of cyber threats.
With the surge in cyber fraud, organizations need to double up their defenses: with effective cybersecurity measures (firewalls, fake phishing schemes, etc) but also with fraud prevention software like Trustpair. If a cyberattacker passes the first cyber barrier, he’ll be stopped by the second one. Fraud detection software carries out ongoing and automated account validation on all supplier data and transaction. Any suspicious activity, change in status or unusual transaction is blocked and a warning is sent to the financial team. This leaves more time for decision-making and strategic task, on top of removing the cyber fraud threat.
“Fighting fraud through manual processes is like taking a knife to a gunfight. You have to fight fraud with the same tools that are being used to perpetrate the fraud: advanced technological tools. We all have to think like criminals, we just can’t act like them” Lee-Ann Perkins, NACHA Advisory Board Member
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