LexisNexis Fraud Multiplier finds cost of fraud soared by up to 41% in EMEA as cybercriminals attack more diverse payment methods
ATLANTE, June 9, 2022 /PRNewswire/ — As digital transformation continues rapidly in financial services and retail, the latest LexisNexis® True Cost of Fraud™ study reveals that cybercriminals are attacking a wider range of payment methods and driving up the cost of fraud to new heights. The cost to businesses of Europethe Middle East and Africa (EMEA) is now 3.49 times the amount of each transaction lost to fraud. The situation varies from one EMEA market to another in terms of severity. The LexisNexis® Fraud Multiplier™ – an estimate of the total amount of losses incurred by a business based on the actual dollar value of a fraudulent transaction – showed a 12.3% increase over 2019 data in Germany27.2% in France34.6% in the Netherlands and 41.5% in South Africa.
Cybercriminals also vary the way they attack transaction chains. Credit transactions accounted for nearly half of fraud losses in 2019 when looking at costs by payment method. The latest study shows that criminals have diversified. While credit transactions still account for the most fraud losses by payment method, there has been a marked increase in losses from digital wallets and direct deposit payment methods. The study found a commensurate resurgence in losses from so-called traditional payment methods such as cash, checks or gift cards as many economies emerge from the pandemic.
Identity verification is a growing challenge in EMEA markets, marked by the increasing use of synthetic identities, which fraudsters create by using a combination of fabricated information and personal information for a real person to build a new digital identity. It’s often difficult for companies to flag them as fraudulent because synthetic identities include some legitimate data.
“Fraud has become more costly for businesses, in part because the volume of human and robotic fraud continues to target large-scale transactions,” said Jason Lane-Sellers, Chief Fraud and Identity EMEA, LexisNexis Risk Solutions. “The flip side is that consumer transaction habits are changing and cybercriminals are adapting to these behavioral patterns.
“With more consumers using a variety of channels to complete transactions, there is no single solution for businesses wishing to authenticate digital identities and reduce fraud losses,” Lane-Sellers continued. “Businesses need a multi-layered offensive using technology and data sources to fight fraud and prevent financial loss. The growing sophistication of some cybercriminals in deploying synthetic identities is an example where solutions more robust and multi-level can significantly reduce the risk to a transaction chain.”
LexisNexis True Cost of Fraud EMEA 2022 Study Methodology
This year’s study surveyed 834 risk and fraud decision makers in January and February 2022. Respondents represented a wide range of financial services and retail traders. The results provide a current overview of key pain points, including adding new payment mechanisms, transacting through online and mobile channels, and international expansion, among other topics. The study also reflects the activity, fraud risks, challenges and costs associated with the impacts of the pandemic. The margin of sampling error for results reported at an aggregate level is +/- 3.41 at the 95% confidence interval.
Download a copy of the LexisNexis True Cost of Fraud™ study – 2022 EMEA Edition.
About LexisNexis Risk Solutions
LexisNexis® Risk Solutions harnesses the power of data and advanced analytics to deliver insights that help businesses and government entities reduce risk and improve decisions for the benefit of people everywhere. We provide data and technology solutions for a wide range of industries, including insurance, financial services, healthcare and government. Based in the Atlanta metro area, Georgia, we have offices around the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information-based analytics and decision-making tools for professionals and enterprises. For more information, please visit www.risk.lexisnexis.com and www.relx.com.
SOURCE LexisNexis Risk Solutions