NEW YORK -- Ninety-six percent of U.S. companies were targeted with at least one fraud attempt in the past year. Ninety percent of those companies were hit with at least one successful attack, according to a new research survey of more than 260 senior finance and treasury leaders.
The proprietary research, which was conducted and released today by Trustpair, uncovered that a rise in cyber fraud, which includes activity such as hacking, deepfakes, voice cloning and highly sophisticated phishing schemes, is driving the increase in attacks.
Eighty-three percent of U.S. companies saw an increase in cyber fraud attempts on their organization in the past year. Fraudsters primarily used text messages (50%), fake websites (48%), social media (37%), hacking (31%), business email compromise (BEC) scams (31%) and deepfakes (11%) to dupe organizations. CEO and CFO impersonations (44%) was the third most common type of fraud.
“Our research shows fraudsters are becoming increasingly more sophisticated in their tactics and their reach is expanding. They’re using new channels to infiltrate organizations,” said Baptiste Collot, Co-Founder and CEO of Trustpair. “As the risk of vendor payment fraud grows, so does the need to automate bank account validations and embed them into your daily processes. It’s essential for winning the fight against fraud and ensuring payments are sent to the correct parties.”
Trustpair’s research – Fraud in the Cyber Era: 2024 Fraud Trends and Insights – unveils the biggest fraud risks, challenges and opportunities facing the enterprise. Key findings include:
- Payment fraud is hitting organizations hard. Thirty-six percent of companies said the average financial loss of successful fraud attacks they experienced was more than $1M. Twenty-five percent said the loss was more than $5M.
- Business relationships are at risk: Seventy-five percent of C-level finance and treasury leaders say they’d stop doing business with an organization that fell victim to payment fraud and lost their payment. Finance and treasury leaders lose sleep over the potential of reputational damage with customers (51%), investors (50%) and suppliers and vendors (45%).
- Companies are trapped in the ‘it won’t happen to me’ mindset: Only 5% of companies say they can’t keep up with the growing sophistication of fraudsters and fraud attacks. Yet 90% of the companies that experienced payment fraud attempts were hit with at least one successful attack.
The Urgent Need to Digitize
Eighty-six percent of all companies were hit with successful payment fraud. Sixty-seven percent of companies expect payment fraud to rise further in 2024 – and most aren’t prepared. Only 16% of companies regularly clean and monitor their vendor database. Just 28% verify information on the companies they work with. These gaps are surprising given scammers posing as trusted sources and the creation of false vendors (47%) and wire transfers (53%) were the two most common types of fraud in 2023.
Companies are starting to realize the value of automation in fighting fraud. Thirty-four percent of companies say they use automated account validation tools to validate vendors, compared to 17% a year ago. Yet 38% of companies say manual account validations are one of their top three challenges when it comes to fraud prevention.
“Over half of companies have actively increased their fraud prevention technology budgets in the past 6-12 months, which shows a collective urgency to invest in fraud prevention. The worst thing a company can do is sit back and do nothing. Get your data under control, digitize your processes, and enable your team to confidently fight back,” added Collot.
Access the full report to learn more about the state of fraud in the U.S.
