Businesses worldwide plan to significantly increase the money they spend on fighting fraud, according to new research from Ravelin.
Globally 75% of merchants polled say they will increase their spending on fraud, with one in five saying they expect spending to increase by 20% or more. In the UK 62% of merchants say they would be increasing investment in fraud, while in the US, the figure is 69%. In other territories it’s even higher – Canada 84% and Australia 87%.
These investments are driving increases in headcount. Four merchants in five (77%) plan to grow their fraud teams in the coming year, to help counter the risk from fraudsters.
In the last twelve months, merchants have seen significant increases in fraud, including online payment fraud (up 59%), account takeover (up 51%), promotion abuse (up 52%), refund abuse (up 53%) and fraud carried out by organisations’ own customers (up 40%).
Ravelin CEO, Martin Sweeney said: “E-commerce businesses are investing heavily in their fraud teams, yet the problem – and its business impact – continue to grow.
“Investing in automation is helping some of the most forward-thinking businesses tackle the growing fraud issue head on.
“Automation empowers businesses to spot fraud earlier and more efficiently which will reduce costs in the long run.
“It also helps teams scale and frees up fraud investigators from day-to-day investigations enabling them to focus on business growth, safe in the knowledge that their fraud risks are under control.”
Not having the right solutions in place for spikes in e-commerce spend (Black Friday in November for example) makes the issue of fraud more pressing. E-commerce is growing fast but with growth comes risk. Around 25% of all sales will be online by 2025 and cybercriminals continue to capitalise on this shift. Fraud will cost merchants in excess of £39 million in 2023 and this figure is set to keep rising, according to the Ravelin report.
But when it comes to tools for tackling fraud most businesses (78%) opt for in-house solutions, which are expensive to maintain and quickly become unsustainable as a business grows. In the UK the figure is 80% while in France it’s 81% and in Germany 77%.
Ravelin’s Global Fraud Trends 2023 survey also examines the most effective tools for fighting fraud.
Machine learning (ML) and two-factor authentication (2FA) are being adopted more regularly by e-commerce businesses to help with the issue. Almost half (48%) of UK businesses say ML is one of the most effective tools in their arsenal. Three-quarters (75%) of UK merchants agree 2FA is crucial.
From feedback across regions, the survey found that there isn’t a singular ‘one and done’ fraud strategy that’s most effective. Different solutions are effective at fighting different frauds, and having a robust tool stack allows teams to consider the complex nature of fraud.
The survey, which spoke to 1900 global fraud professionals, also examines the increase of ‘newer’ types of fraud which are prevalent globally.
Further information – https://www.ravelin.com/