Fraud impacts more than half of UK businesses
The majority of businesses in the UK feel confident in their anti-fraud measures yet more than half of financial decision-makers believe their businesses have been impacted by fraud, according to a new report.
This could suggest that many businesses are over-confident in the anti-fraud measures they have implemented.
The first UK Business Payments Barometer, from Bottomline Technologies, polled 400 financial decision makers on issues of liquidity, fraud and payments. The survey took in businesses from every sector and sizes ranging from small businesses to major companies employing more than 10,000 people.
It found that 69% of respondents said they were confident in their anti-fraud measure. At the same time, 53% admitted they had been negatively impacted by fraud issues.
SMEs were particularly worried about the impact of cyber-crime, with more than half (52%) saying they were most concerned about types of online fraud such as hacking. More than a third (34%) of larger corporates said they were most concerned with the threat of external exploitation of their internal payment processes and staff.
Some possible exploitations include invoice diversion fraud and CEO fraud, which is also known as ‘whaling’. This is a form of phishing where an email is sent purporting to be from someone higher in the organisation, with the intention of exposing the recipient to malware or getting them to reveal sensitive information.
A report published in May suggested that the costs to businesses could be extremely high, especially if individual businesses have inadequate security measures and a lack of contingency planning in place.
The 2016 Annual Fraud Indicator, based on research from Portsmouth University, estimated that the annual cost of fraud could be as high as £193 billion a year. This is almost four times higher than a previous government estimate of £50 billion.
This report found that procurement could be particularly vulnerable to scams as fraudsters used techniques such as fake invoices. Payroll fraud was also responsible for estimated losses of £12 billion per year, or 8% of the total cost to the private sector.
By Phil Smith