More than two-thirds of financial institutions lost over $500,000 to fraud in 2022, Alloy report finds
A survey of over 250 financial services decision makers found that fraud increased year-on-year since 2021, leading to costly losses
NEW YORK, 9 January 2023 /PRNewswire/ — Leading Identity Decisioning Platform, Alloy, today released a report that found 27% of respondents lost over 1 million dollars to fraud in the last 12 months. 70% of respondents reported losing 500,000 dollars to fraud, with fintech companies and regional banks most likely to report higher losses. 37% of fintech companies and 31% of regional banks estimated to lose between $1–10M to fraud.
The annual Fraud Benchmark Report surveyed over 250 decision makers working in financial institutions, including community banks, fintech, crypto, national banks, regional banks and electronic lending institutions). The survey went off 8.–20. September 2022and respondents came from roles across fraud, compliance, risk technology procurement, digital banking strategy and account opening.
Fraud continues to plague financial institutions of all sizes and across all segments. A third of respondents said they experienced between 1,000 and 10,000 fraud attacks in the past twelve months. 91% of respondents said fraud has increased year over year since 2021.
“Fraud is the highest it’s ever been,” said Tommy Nicholas, CEO and co-founder of Alloy. “Rapid digitization and an influx of pandemic fraud cash have created the perfect conditions for fraudsters to thrive. Regardless of sector or size, financial institutions must do more to keep their customers’ assets safe from fraud, but without compromising the customer experience. . “
The report also found that fraud prevention is a costly and time-consuming business for financial institutions: two-thirds of respondents reported that over half of their workforce is engaged in fraud-related activities. 71% of respondents have increased their expenditure on fraud prevention on an annual basis. Respondents were also concerned about additional “hidden” costs of fraud, such as legal consequences, regulatory fines, reputational damage and loss of customers.
Respondents reported that the main barrier to defending against fraud is automation. 46% of respondents cited a greater need for automation as the most common barrier to being prepared to fight fraud, followed by the absence of dedicated fraud teams (41%) and the inability to adapt to new threats (39%).
For more insight, read the full report here.
About Alloy
Alloy helps over 360 banks and fintech companies make secure and seamless fraud, credit and compliance decisions. Founded in 2015 and backed by lead investors Lightspeed Venture Partners, Bessemer Venture Partners and Canapi Ventures, Alloy’s platform connects companies to more than 170 data sources for KYC/KYB, AML, credit and compliance data through a single API to contribute to to create a future without fraud. Learn more at https://www.alloy.com
Media contact:
Kylee Sibilia
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SOURCE Alloy
