Fraud costing Australian financial services dearly

For every fraudulent transaction, the cost to Australian financial services is 3.78 times the amount of the lost transaction value, according to a study.

The LexisNexis Risk Solutions ‘2021 True Cost of Fraud APAC Study’ covered the retail, ecommerce, and financial services sectors for Australia, Hong Kong, India and Japan.

The financial services portion covered asset managers, financial planners, consumer lending and banking/mortgages.

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The total average of retail, ecommerce and financial services was 3.51, which showed that financial services was more negatively affected by fraud.

Identity fraud was single largest portion of fraud losses (32%) and financial services (41%) was the highest portion.

There was an average of 1,660 successful fraud transactions a month for Australia, although this was lower than its APAC peers.

Cameron Church, LexisNexis Risk Solutions director of fraud and identity, said: “As fraudsters become more sophisticated and their methods more complex, businesses need a robust fraud and security technology platform that helps them adapt to a changing environment, offering strong fraud management while maintaining a low-friction customer experience.

“A successful fraud detection and prevention approach involves an integration of technology, cybersecurity and digital experience programs to address unique risks from different transaction channels and payment methods.

“High fraud costs impact ecommerce merchants, retailers and financial institutions as they increase each year – even without the influence of COVID-19.”

The report’s surveyed 418 risk and fraud executives in retail, ecommerce, financial services and lending companies in the APAC region in 2021. 

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