Everyone knows business online banking fraud has increased over the past few years, with new incidents reported every day. But a study released by the Ponemon Institute and Guardian Analytics yesterday quantifies just how large and pervasive this problem has become.
According to the research, which polled 500 executives and business owners from small and medium businesses in the United States,
- 55 percent of businesses were victims of fraud in the last 12 months, with
- 58 percent of fraud enabled by online banking activities.
- Eighty percent of banks failed to catch fraud before funds were transferred out of their institution.
- In 87 percent of fraud attacks, the bank was unable to fully recover assets and
- 57 percent of the respondents that experienced a fraud attack were not fully compensated by their banks.
- Twenty-six percent were not compensated for any part of their losses.
All this fraud has damaged banks' business customer relationships:
- 40 percent of businesses said they have moved their banking activities elsewhere after a fraud incident.
- Eleven percent of businesses that have experienced fraud claimed they have terminated their banking relationship following fraud attacks, and an additional
- 29 percent said they did not fully terminate their relationship, but moved their primary cash management services to another institution.
The ROI of investing in fraud prevention is clear when you consider how fraud and churn drive productivity and profit loss as well as legal and reputation risks."Continue Reading at BankTech
