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.
Michael Podgortsev is a Director of Data & AI Strategy at a technology advisory firm, and a former CTO with 15 years of building data and AI systems that assess and serve customers. He writes about how systems optimized for an 'average' quietly fail the people who don't fit it.
Norm Hudson is CEO and co-founder at Staff Boom. Norm Hudson is an accomplished insurance executive with over two decades of industry expertise, has a proven record in leadership and management. Previously, as principal owner and CEO of Inszone Insurance Services, Norm Hudson led a team across 40 locations, propelling Inszone into the top 100 national insurance agencies. His commitment to an open, transparent, and accountable company culture played a pivotal role in Inszone's success.
With roles such as COO of Confie Seguros and president/CEO of Cost U Less Insurance, Norm demonstrated expertise in strategic leadership, sales optimization, and achieving significant revenue growth. Norm's legacy in the insurance industry is defined by innovation, leadership, and success, notably exemplified in creating Staff Boom to meet industry-specific needs.
Lilia is SVP of Product Management for the Property & Casualty and Reinsurance division at Sapiens International. With close to 25 years at IDIT/Sapiens, she has shaped the product direction of one of the insurance industry's most established core platforms — from policy administration and claims through to digital transformation and AI-driven automation.
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.
