Nearly three quarters of corporate treasury and finance professionals said their companies were victims of payments fraud last year, according to the 2017 AFP Payments Fraud and Control Survey, underwritten by J.P. Morgan. This is the highest percentage since the survey debuted in 2005 and comes after a dramatic increase in 2015. Check fraud and business email compromise are both on the uptick.
Checks continue to be the most popular method for committing payments fraud. Fully 75 percent of organizations that were victims of fraud in 2016 experienced check fraud—an increase from 71 percent in 2015. This is a reversal of the declining trend AFP has observed since 2010.
Additional highlights of the survey, which had 547 responses:
- 74 percent of survey respondents said their organizations were victims of business email compromise (BEC) in 2016—a 10 percentage point increase from 2015.
- 70 percent of organizations are being proactive and have implemented controls to prevent BEC.
- 63 percent of payments fraud attempts were made by outside individuals.
- Over 70 percent of corporate treasury and finance professionals are hesitant about adopting mobile payments at their organizations as they question the security of this payment method.
“With the advancement of technology, organizations are more vulnerable to fraud attacks now than before, and business leaders need to equip their people and systems with the tools and resources needed to prevent fraud and alleviate the impact of an attack,” said Jim Kaitz, president and chief executive officer of AFP. “Companies that offer mandatory training for all employees, particularly around cybersecurity, and that have a plan to respond to payments fraud, will fare better than those that do not.”
Nancy McDonnell, managing director and treasury sales executive at J.P. Morgan, added: “The fraud survey serves as an important resource in understanding the potential risks within the payments industry and should not be underestimated. With three-quarters of companies experiencing fraud in 2016, it is important that businesses take preventive measures by educating their employees and implementing the products and processes they need to prepare and protect their assets and data from cyberfraud.”
Full results of the survey are available here.