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.
Vishal Sankhla is co-founder and CEO of Outmarket.
Sankhla has dedicated his career to building intelligent, automated systems that replace inefficiency with speed, clarity, and action. He previously led the platform team at Uber, was Director of Engineering at Facebook, and Head of Product at Ethos Life Insurance.
At Outmarket, Sankhla leads a team that delivers a comprehensive AI solution to the manual workflows, siloed data, and outdated processes that cost brokers and carriers billions in lost productivity each year. Outmarket is now trusted by over 200 of the world's most successful insurance agencies to streamline operations, reduce E&O exposure and drive growth. Connect with Vishal on LinkedIn.
Mike Gerhard is chief data and AI officer at BDO USA, where he is responsible for integrating AI into BDO's operations. He has led numerous technology initiatives, including the enterprise digital transformation and innovation program. Additionally, he leads the research and AI development team.
Patrick Armstrong leads the revenue function at ReSource Pro, guiding the company's go-to-market strategy across the retail, MGA/wholesale, and carrier segments. With more than 30 years of sales and insurance leadership, including 17 years as an agency principal, he brings deep industry expertise to helping organizations improve performance and drive profitable growth.
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.
