Fortent, a company specialising in anti-money laundering, Know Your Customer, anti-terrorist financing, and anti-fraud technology, has published a white paper highlighting the cost of fraud to a company.
“The financial cost of fraud to a company may be three or more times the value of the fraud loss amount,” says Steve Solberg, the fraud product manager at Fortent and author of the paper. “Fraud is not static. It continues to evolve with criminals, typically following the path of least resistance. Once new anti-fraud measures are implemented, criminals move to another scheme until they figure out how to beat those measures.”
The paper, ‘Winning the War Against Financial Fraud’, outlines current fraud challenges and how banks are protecting themselves and their customers.
In his paper Solberg discusses cheque fraud and reports that despite the fact that electronic payments are rising at 12.9 percent per year, the total amount of attempted cheque fraud is more than $5.5 billion annually, according to a 2004 ABA Fraud Survey. The US writes two-thirds of the world’s paper cheques, more than 35 billion each year.
The paper also predicts that, due to increasing regulatory expectations, bank regulatory agencies may soon mandate that financial institutions implement stronger programmes for identity-theft prevention.