Volume and velocity of fraud risks exploding

The volume, cost, and complexities of fraud are on the rise, and the increase in sophistication and frequency of fraud is accompanied by significant revenue threats that companies can no longer afford to ignore.

The ramifications of negative business and customer impacts make fighting fraud a top priority heading into 2024.

Such are the findings of SEON’s Fraud Trends 2024 guide, revealing businesses’ challenges for the year ahead.

The report, informed by an extensive survey of 316 cross-industry experts and enriched with proprietary and independent fraud research, casts a spotlight on the pressing issues and strategic imperatives for businesses navigating fraud’s complex terrain.

Responses from the industry were almost unanimous – 87% of the industry experts surveyed expect an uptick in fraud in the year ahead. This prediction follows a year in which the volume and types of fraud increased.

In 2023, 50% of surveyed industry players reported that the volume of fraud they encountered rose, while 60% saw the number of fraud types expand.

“The time for decisive action is now,” said Tamas Kadar, CEO and co-founder, SEON.

“Business leaders and fraud and risk management teams must combat the increasingly sophisticated and complex emerging threats we are now seeing at scale thanks to advanced technologies like AI and machine learning.

This report signals that companies can no longer afford to not have a proactive anti-fraud strategy. To safeguard their revenue, it’s imperative to adopt a comprehensive approach to fraud prevention.”

As 2024 hits its stride, an increase in fraud sophistication and frequency poses significant threats that will intensify as the year unfolds.

Key finding:

• Widespread Acknowledgement of Increasing Fraud
  A significant majority – 87% of respondents expect the volume of fraud to increase this year, driven by the advancement of technologies like artificial intelligence (AI), the proliferation of Fraud-as-a-Service (FaaS), the demand for fast transactions and escalating economic pressures.
• The Dual Role of AI in Fraud Dynamics
  AI is expected to be the biggest challenge for fraud prevention in the coming months, with 71% of respondents naming it as the number one issue, particularly in automated attacks and deepfake technologies.
• Rising Fraud Types and Countermeasures
  The types of fraud expected to see a notable increase include phishing, synthetic fraud, identity theft, account takeovers (ATO) and money-laundering with
  73% of respondents expect an uptick in these volumes.
• Strategic Investment in Fraud Prevention
  Overcoming cost and integration issues will prove essential for effective fraud prevention with 57% of respondents planning to increase their spending on anti-fraud solutions in the year ahead.