Fraud is continuing to increase this year, in part due to the COVID-19 pandemic, according to a new survey by the Association of Certified Fraud Examiners.
The report found that 79 percent of anti-fraud professionals have seen an increase in the overall level of fraud as of November, compared to 77 percent in August and 68 percent in May. Thirty-eight percent of the respondents said in November the increase has been significant, compared to 34 percent in August and 25 percent in May.
Amrish Singh is CEO and Co-Founder of Liberate AI.
Mark Klein holds the position of Chief Digital Officer (CDO) and is the member of the Board of Management at ERGO Group AG responsible for digitalisation, marketing and global partnerships. Having previously held senior positions in the telecommunications industry – including at Vodafone and Deutsche Telekom – he has been driving ERGO's digital transformation since 2016. His goal is to systematically transform ERGO into a digital-first company. Under his leadership, ERGO has made significant strides in digitalisation, notably by leveraging technologies such as artificial intelligence, voice technology, robotics, virtual reality and process mining. In addition, the strategic partnerships he has forged with leading global technology companies enable him to evaluate the latest digital trends. In terms of marketing, his focus is on strengthening the brand, enhancing customer experience and optimising performance marketing strategies to maximise ROI through data-driven campaigns. Through an innovative social media strategy, he strengthens the brand's visibility across digital channels.
Cyber fraud, payment fraud (such as schemes with debit and credit cards) and identity theft are the three top fraud schemes seeing increases, according to anti-fraud professionals.
The largest increase in observed fraud was in financial statement fraud, with 7 percent more anti-fraud professionals reported seeing financial statement fraud in November, compared to August. That could be because as companies continue to see their profits drop, they feel more pressure to cook the books.
The survey also found 77 percent of anti-fraud professionals report that investigating and preventing fraud is more challenging now, while 71 percent said detecting fraud is more challenging as a result of the pandemic.
ACFE members anticipate the fraud trend will continue, even as vaccines have begun rolling out this week in the U.S. Ninety percent of the survey respondents expect a further increase in the level of fraud over the next 12 months, with 44 percent predicting the change is likely to be significant.
Nearly half (48 percent) of the organizations polled expect to increase their investments in anti-fraud technology, and 38 percent intend to raise the use of fraud-related consultants or other external resources. Budgets for anti-fraud training and professional development are experiencing a similar increase (according to 37 percent of the organizations polled), but nearly one-quarter (24 percent) anticipate a decrease in this area. The budget component most likely to see decreases is travel for anti-fraud staff, which shouldn’t be surprising given the plunging levels of air travel in general over this past year, with 38 percent of the survey respondents expecting a reduction in funds for travel in the year ahead.
