Sydney, Australia – Around 66% of Australian organisations indicated an increase in fraud year-on-year, according to the latest data from LexisNexis Risk Solutions, a cybersecurity firm.
In this report, it was observed that more than half of organisations in Australia saw a rise in fraud in the 12 months prior to the survey. The organisations, in particular, have also incurred an average cost of AUD$3.68 for every Australian dollar lost to fraud, with retailers facing $2.96 and financial institutions facing $4.21.
These costs include financial losses due to fraud, internal labour expenses, external costs, legal fees, recovery fees, and the expenses associated with replacing or redistributing lost or stolen merchandise.
Data from the findings further found that digital channels now contribute to 51% of overall fraud losses in the Asia Pacific region, surpassing physical fraud for the first time.
With cybercriminals leveraging the anonymity of digital, cross-border transactions for quick and untraceable fraud, the proliferation of scams and the use of technology such as artificial intelligence have also increased their capacity to take advantage of both consumers and businesses.
Furthermore, it was revealed that the stage of the customer journey with the highest fraud losses is new account creation, posing the greatest challenge for both financial institutions (46%) and retailers (44%).
Interestingly, the study also pointed out three significant findings stating the commercial impact of fraud, the changing fraud management practices, and the need for fraud management and authentication solutions.
With 75% of Australian respondents stating that fraud has influenced customer satisfaction compared to 73% across APAC, approximately 79%, on the other hand, noticed its impact on customer conversion. This appeared higher than the 75% recorded in APAC.
Among these findings, it was also noted that fraud and its associated costs are dynamic threats that businesses cannot easily diminish. This encompasses new payment methods that provide fraudsters with opportunities to exploit vulnerabilities in the retail sector.
Lastly, the organisation has also urged companies to embrace forward-thinking fraud management and authentication solutions. This includes utilising the capabilities of technologies such as AI, machine learning, and biometric and behaviour-based authentication methods.
Konstantin Poptodorov, director of market planning for Australia and New Zealand at LexisNexis Risk Solutions, said, “New forms of fraud clearly increase the risk of financial losses for consumers and businesses, including both the direct and consequential expenses, such as staff time to investigate incidents.”
“The issues facing businesses become even more challenging due to the fraud multiplier effect, where the losses experienced by organisations continue to increase and far exceed the lost face value in any transaction. Preventing fraud requires a multi-layered approach throughout the customer journey,” added Konstantin.
