65% of financial professionals blame pandemic for increase in payments fraud
by Ben Poole
More than 500 treasury and finance professionals have participated in the Association for Financial Professionals (AFP) 2021 Payments Fraud and Control Survey, underwritten by J.P. Morgan. Of those respondents that reported increased fraud activity at their organisations, nearly two-thirds of treasury and finance professionals (65%) believe that the COVID-19 pandemic is to blame for some of the uptick in payments fraud at their companies.
BEComing a nuisance
Furthermore, business email compromise (BEC) continues to be the primary source for attempted or actual payments fraud, as 62% of companies that experienced attempted or actual payments fraud in 2020 did so as a result of BEC. Although the percentage of companies financially impacted by BEC has been declining, over three-quarters of respondents (76%) report that their organisation had been targeted by BEC attempts in 2020.
Accounts payable (AP) departments are the most susceptible to BEC fraud. Sixty-one percent of respondents report that their AP department is most often vulnerable to BEC.
"While the COVID-19 pandemic has certainly impacted how organisations operate, employees must continue to be watchful of fraudulent activity and they must have access to the training and education needed to detect the same," said Jim Kaitz, president and CEO of AFP. "Our working environment may have changed, but it is even more crucial to be vigilant now and remember that fraud is still prevalent – whether we are working from the office or not."
An ever-present threat to treasurers
In 2020, 74% of organisations were targets of payment scams. While that is smaller than the shares reported in 2018 and 2019, it still indicates that a large percentage of companies continue to be impacted by payments fraud.
According to 77% of treasury and finance practitioners, educating employees on the threat of BEC and training them to identify spear phishing attempts is an important component in controlling this most prevalent of fraud methods.
In 2020, cheques and wire transfers continued to be the payment methods most impacted by fraud activity (66% and 39%, respectively). However, the incidence of cheque fraud activity is on a decline and the cheque fraud activity observed showed an 8-percentage-point decrease from last year.
"We’ve seen companies of all sizes across industries shift how they work, manage payments and move money over the last year," commented Sue Dean, head of Product Delivery for J.P. Morgan’s Commercial Banking and Wholesale Payments businesses. "With changes in behaviour comes more responsibility for everyone involved. Raising awareness and educating both leaders and employees is critical, as is offering intentional and intuitive digital solutions so companies are equipped to combat and properly protect themselves against fraud."
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