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.
Guizhou Hu is Vice President, VP, Head of Risk Analytics at RGA, where he supports global RGA underwriting initiatives and produces internal and external thought leadership pieces based on RGA's in-depth risk analytics. Before joining RGA in 2018, Guizhou served as Vice President, Chief Decision Analytics, for Gen Re and as a Senior Vice President for BioSignia Inc. Guizhou holds a medical degree from Beijing Medical University and a Ph.D. in Philosophy from Cornell University.
Taylor Pickett is a Vice President and Actuary at RGA. Taylor currently works as part of the pricing team supporting RGA's US Mortality business, serving as the actuarial subject matter expert for Underwriting Modernization. Taylor assists clients in understanding, incorporating, and evaluating the impacts of emerging underwriting programs and new sources of evidence. His responsibilities include supporting newer underwriting paradigms through program monitoring, data analysis and assumption development. Taylor has over 10 years of life reinsurance experience including roles in valuation, experience studies, research, and pricing. Taylor holds a Master of Science degree in Actuarial Science from Maryville University in St. Louis, Missouri. He is a Fellow of the Society of Actuaries and a member of the American Academy of Actuaries.
Nic Puckrin is an investment expert and passionate advocate of cryptocurrency and blockchain technology. He began his career in a quantitative role at Goldman Sachs, but was attracted by decentralized and permissionless finance. Nic founded Coin Bureau in 2017, which publishes independent crypto-educational content. Today, Coin Bureau operates several media assets, including the largest crypto-focused YouTube channel in the industry, with over 2.6 million subscribers.
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.
