The impact of financial fraud on business

April 23, 2014
Tim Wheatcroft
The impact of financial fraud on business

We recently held a webinar with Deloitte on financial fraud, and how treasury technology can play a role in helping companies to defend against it. During the webinar, we asked the 400+ attendees about their own experience with financial fraud.

As you can see by the infographic, the results are quite alarming. A full 78 percent of treasury and finance pros say that their company has been the target of a financial fraud attempt. More shocking is that of those who have been targeted, more than 38 percent had suffered losses as a result.

The Business Impact of Financial Fraud

 

For the fraudsters, that’s a pretty impressive hit rate, and one that any major league slugger would love to see. One in seven people don’t know if they have ever been a target, and most, worrying 5.6 of the respondents know that they have been targeted, but don’t know if they lost money as a result. Given that we’re talking about finance and treasury professionals, that this number is anything higher than zero is pretty scary.

So what are companies doing about it? One would have thought that with attempts to defraud companies being so prevalent (and success being so commonplace), that fraud prevention would be a huge concern for finance departments. Seemingly not. While four in 10 companies are constantly reviewing their fraud prevention processes, more than a third haven’t looked at them in the past year, and a shocking 18 percent of companies have never reviewed their processes.

Let’s put all of this information into perspective. According to the U.S. Census Bureau1, there are 130,000 medium- to large companies in the U.S. (i.e. more than 100 employees).  Of these:

  • 98,000 have been the targeted of attempted or successful financial fraud
  • 37,500 have been the victims of financial fraud
  • 7,000 have been targeted for financial fraud, but have no idea if they incurred any losses
  • 45,000 have a fraud prevention policy / process that is at least a year old
  • 22,500 have never updated their fraud prevention processes and policies

All in all – pretty alarming statistics. So that you can take a step in stopping your company being the next victim of financial fraud, we have developed an informative white paper. The paper outlines some of the technical and operational processes that you can put in place to strengthen your organization. Don’t become the next big victim.

 

[1] U.S. Census Bureau data on company size (2012)