According to a PwC study, half of UK organisations have revealed that they have been the victim of fraud and/or economic crime in the last two years.
More than half (51%) of the most disruptive crimes resulted in losses over £72,000, compared to 37% globally, and nearly a quarter of UK victims (24%) lost more than £720,000 as a result.
Commenting on this, Robert Capps – vice president of business development at fraud prevention firm, NuData Security – said: “The magnitude of these losses can’t help but have a dampening effect on the UK economy and on those businesses who are experiencing losses of over £72,000. It’s also bad news for customers, who often bear the brunt of many direct costs (especially in account takeover and identity theft).”
It is clear that UK organisations are generally not doing enough to prevent fraud. Only half of respondents to the survey said that their firm had carried out a fraud risk assessment in the last two years – a first step to establishing a defence.
Fran Marwood, forensics partner at PwC, said that while the direct losses as a result of fraud and criminal activity are quantifiable, “the wider effects can be far more damaging”.
>See also: Cyber-related fraud hitting new levels
“UK organisations told us that the cost and disruption of sorting out the aftermath, as well as the effect on employee morale, business relations, and brand are big hidden costs,” he said.
“Times of uncertainty and change often help fraudsters to exploit weaknesses in an organisation’s systems, so in this current period of rapid business change, understanding the risks and possible avenues for attack is more crucial than ever.”
The report found that cybercrime has been the most prevalent cause of fraud globally, and that much of the cybercrime targeting UK organisations comes from overseas.
People’s understanding of threat is crucial to effective cyber defence, “so training, awareness and escalation routes are just as important as defensive technology,” added Marwood.
“To detect out-of-character and potentially fraudulent transactions before they can create a financial nightmare for consumers – and for companies – we must adopt new authentication methods that hackers can’t deceive,” explained Capps.
“Solutions based on passive biometrics and interactional signals are leading the way to provide more safety for consumers and less fraud in the marketplace. These solutions identify machines from humans, then separate good machines from bad, selects known humans from unknown humans, and finally sorts unknown humans demonstrating low-risk signals from unknown humans demonstrating high-risk signals. This process lets organisations fast-track the known and low-risk users for an optimal experience, saving the friction and traditional authentication methods for the highest risk users. These layers validate the user through information that hackers can’t replicate, securing the good user’s transaction at every step.”