A new research survey conducted by Trustpair has unveiled startling statistics about the prevalence of cyber fraud in U.S. companies. The survey, involving more than 260 senior finance and treasury leaders, found that a staggering 96% of U.S. companies were targeted with at least one fraud attempt in the past year, with 90% experiencing at least one successful attack.
Spike in Payment Fraud Attempts
Payment fraud attempts on U.S. businesses surged by 71% in 2023. The research indicates that fraudsters are increasingly employing sophisticated methods such as text messages, fake websites, social media, hacking, business email compromise (BEC) scams, and deepfakes. CEO and CFO impersonations were also notably used in 44% of the fraud cases.
Baptiste Collot, Co-Founder and CEO of Trustpair, expressed concern over these findings: “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. 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.”
Financial Impact and Business Relationships at Stake
The financial impact of these fraud attacks is substantial, with 36% of companies reporting average losses exceeding $1 million, and 25% experiencing losses over $5 million. The survey also reveals that 75% of C-level finance and treasury leaders would cease business with organizations that fall victim to payment fraud.
Complacency and Lack of Preparedness
Despite the rising threat, many companies remain in a 'it won't happen to me' mindset, with only 5% acknowledging the growing sophistication of fraudsters. This complacency is concerning, given that 90% of those targeted were hit by at least one successful attack.
Digitization: The Way Forward
With 86% of companies hit by successful payment fraud and 67% expecting these incidents to rise in 2024, the need for digitization is urgent. However, only a minority of companies are taking proactive measures, with just 16% regularly cleaning and monitoring their vendor database and 28% verifying information on companies they work with.
Trustpair notes a positive trend in the adoption of automated account validation tools, which has risen from 17% to 34% over the past year. However, 38% of companies still cite manual account validations as a significant challenge in fraud prevention.
Collot emphasizes the urgency of action: “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.”
The findings from Trustpair’s research are a clarion call for U.S. companies to bolster their defenses against the evolving landscape of cyber fraud. As fraudsters employ increasingly sophisticated tactics, adopting advanced, automated tools and processes is not just beneficial but essential for companies to protect their financial assets and maintain trust in their business relationships.