Discover True Cost of Fraud™ Study Results
Navigate the rising risk of fraud and learn how to grow your business more safely. Explore current fraud costs, attack rates, trends, challenges and recommendations for your industry.
Discover This Year’s Key Fraud Cost Drivers
The LexisNexis® True Cost of Fraud™ Study offers a timely picture of current fraud trends facing the financial and retail industries in the U.S. and Canada by analyzing in-depth surveys from over 700 risk and fraud executives every year.
Building on 15 consecutive years of research, the True Cost of Fraud study explores current and emerging fraud trends, and shares insights and recommendations on how to better manage fraud risks and strengthen customer trust.
Building on 15 consecutive years of research, the True Cost of Fraud study explores current and emerging fraud trends, and shares insights and recommendations on how to better manage fraud risks and strengthen customer trust.
Select a True Cost of Fraud™ Study from the tabs below:
Ecommerce and Retail Fraud Increases
Identity and transaction fraud pose double threat
As adoption of digital services increases across North America, cybercriminals are exploiting more opportunities to target both consumers and businesses. The results of the latest LexisNexis® True Cost of FraudTM Study for Ecommerce and Retail show a substantial increase both in the volume and sophistication of fraud.
New account creation poses the greatest risk, according to merchants. Nearly half of fraud losses can be traced back to this stage in the customer journey, due to common challenges verifying consumer identity information, discerning between human and malicious bot transactions and assessing international transactions with specialized fraud prevention tools. Merchants report 30% greater losses due to chargebacks in 2023 than in 2022.
Scams drive over one-third of losses
Nearly half (46%) of merchants say they have undertaken efforts to educate customers about information security and how to protect themselves against scams. Unfortunately, the number of consumers falling prey to scammers continue to grow. Across North America, about half of all merchants report seeing an increase in scams over the last year, with ecommerce merchants more likely to encounter scams.
With scams, criminals diversify their efforts and increase their chances of illicit gain. Merchants will need to revisit fraud prevention protocol across the consumer journey in order to mitigate the additional risk exposure without adversely impacting the customer experience.
Additional 2023 True Cost of Fraud Study Highlights
Identity Verification Challenges
Identity fraud remains a key issue for merchants and represents a considerable share of fraud losses. Breached digital-identity data (e-mail addresses, phone numbers) are being exploited for synthetic identities and fake accounts.
Changing Payment Methods
The payments landscape continues a rapid evolution. Merchants are involved in more transactions involving non-bank, third-party payment providers, which can introduce new, often unexpected risks. Digital payments and BNPL transactions made up 37% of fraud losses in 2023.
Integration of Cybersecurity and Digital Customer Service
Over two-thirds (69%) of North American merchants say they have integrated their digital/customer experience operations with fraud prevention, as they attempt to minimize customer friction, especially since abandonment is a common risk with remote channel transactions.
Customer Relationships Are On The Line
The impact of fraud smolders over time. Three-quarters of respondents report that fraud has negatively impacted their brand and customer experience, either through difficulty establishing trust with consumers, spurring churn or impacting conversion rates.
Verify Online and Offline Traits
To be effective, solutions must be able to verify both physical and digital identity attributes across different customer touchpoints and assess transaction risk in a fast, seamless manner for customers.
Smart Practices Pay Off
Merchants who invest in multi-layered solutions that are integrated with cybersecurity and digital experience operations sustain lower fraud losses. Comparatively, they incur 46% less in fraud losses than peers with a limited range of solutions in place.
Insights From Past Ecommerce and Retail Studies
Globalization And Digitalization Increase The Risks Of Fraud
Identity Theft And Digital Payment Fraud Grew Quickly according to the LexisNexis® True Cost of Fraud™ Study.
In North America, 57% of financial services organizations and 66% of lending organizations report an increase in overall fraud levels in the past 12 months.
Identity theft and fraud targeting mobile transactions outpaced other fast-growing vectors, with account takeover fraud and scams also increasing at over half of surveyed firms.
Identity theft and fraud targeting mobile transactions outpaced other fast-growing vectors, with account takeover fraud and scams also increasing at over half of surveyed firms.
LexisNexis® Risk Solutions has been tracking fraud costs and attack trends for more than 14 years. The LexisNexis® True Cost of FraudTM Study: Financial Services and Lending Report examines current challenges and successes:
Fraud costs and attack volumes to financial services providers
Impact of scams targeting consumers directly
Challenge of accurate identity verification across the customer journey
How a multi-layered solutions approach helps mitigate more financial loss
Organizations that build a more robust posture against fraud throughout customer journey stages report 41% lower fraud losses compared to the least mature organizations.
Fraud Attacks Increase For Financial Services and Lending Firms
Key trends in this industry related to fraud include scams targeting digital payments, increased bots and challenges with identity verification.
The True Cost of Fraud™ Study: North American Financial Services and Lending Report examines (a) how financial services businesses are keeping ahead of fraudsters, (b) what processes they have implemented, (c) what types of fraud are trending and (d) what prevention methods are working.
The findings come from a survey of 350+ risk and fraud management executives in financial services and lending companies in the U.S. and Canada. Subject areas include fraud costs and attack volumes, changes across consumer-engagement channels, scams impacting the customer journey and fraud-prevention smart practices. Get all the latest findings, figures and recommendations.
The True Cost of Fraud™ Study: North American Financial Services and Lending Report examines (a) how financial services businesses are keeping ahead of fraudsters, (b) what processes they have implemented, (c) what types of fraud are trending and (d) what prevention methods are working.
The findings come from a survey of 350+ risk and fraud management executives in financial services and lending companies in the U.S. and Canada. Subject areas include fraud costs and attack volumes, changes across consumer-engagement channels, scams impacting the customer journey and fraud-prevention smart practices. Get all the latest findings, figures and recommendations.
Infographic: Key Study Findings
Which fraud type has increased more? What are the most common impacts of fraud? Which solutions appear most frequently in two-year investment plans? Find out.
The Rising Cost of Fraud
U.S. and Canadian financial services firms’ fraud costs continue to rise, up to 31% year-over-year. The cost of fraud is highest among
Canadian credit lenders, where every $1 of fraud loss actually costs $4.67. For U.S. firms, every $1 of fraud loss costs $4.41.
Fraud attack volumes rose across industries and geographies, particularly at account login.
Nearly two-thirds (63%) of financial firms report overall fraud increasing at least 6% in the prior 12 months. Synthetic identity fraud
incurred the greatest losses of any fraud type, causing the greatest impact at distribution of funds for U.S. firms and Canadian financial services.
Canadian credit lenders, where every $1 of fraud loss actually costs $4.67. For U.S. firms, every $1 of fraud loss costs $4.41.
Fraud attack volumes rose across industries and geographies, particularly at account login.
Nearly two-thirds (63%) of financial firms report overall fraud increasing at least 6% in the prior 12 months. Synthetic identity fraud
incurred the greatest losses of any fraud type, causing the greatest impact at distribution of funds for U.S. firms and Canadian financial services.
Key Challenges in the Fight Against Fraud
The online and mobile fraud landscape continues to evolve. Fraudsters relentlessly seek new vulnerabilities to exploit, such as through new methods of payment and changing consumer behavior. They’re also continually devising new scam stories and increasing the volume of automated attacks via bots.
Financial services companies and lending institutions can never let their guard down. Effective fraud prevention begins with confident identity verification and rigorous authentication, but without unnecessarily impacting the customer experience. Both verification and authentication remain challenges for financial services firms and lenders, elevating risk of fraud across the customer journey.
As more transactions occur online, and consumers become increasingly comfortable interacting via digital channels, financial businesses must navigate substantial and varied forms of risk, including some that may evade legacy fraud and risk mitigation processes.
However, consumers expect fast, convenient experiences across platforms and devices. Undue delay or caution can result in a negative customer experience that impacts brand reputation and customer satisfaction.
Financial services companies and lending institutions can never let their guard down. Effective fraud prevention begins with confident identity verification and rigorous authentication, but without unnecessarily impacting the customer experience. Both verification and authentication remain challenges for financial services firms and lenders, elevating risk of fraud across the customer journey.
As more transactions occur online, and consumers become increasingly comfortable interacting via digital channels, financial businesses must navigate substantial and varied forms of risk, including some that may evade legacy fraud and risk mitigation processes.
However, consumers expect fast, convenient experiences across platforms and devices. Undue delay or caution can result in a negative customer experience that impacts brand reputation and customer satisfaction.
Plot the Path Forward
The True Cost of Fraud Study of North American Financial Services and Lending Report delivers not only essential insight for navigating emerging fraud trends, but also indicates recommendations to fortify risk management strategies:
Include digital identity attributes and behavioral analytics to increase trust in anonymous users.
Take a more dynamic, agile and simplified approach to protect each phase of the customer journey.
Detect and mitigate more scams via multiple layers of complementary capabilities and robust intelligence.
Distinguish legitimate customers from malicious bots via advanced technology-based solutions.
Mitigate fraud during the distribution of funds via transaction risk technology.
Study findings underscore the value of adding third-party, near real-time data and transaction tracking tools.
There’s also a need to employ more digital identity and behavior data and analysis to enable safer and more efficient remote digital interactions and transactions.
Balance is key: Best results come from a multi-layered approach capable of adapting to the potential risk of each transaction. Organizations that build a broad net of defense against fraud throughout customer journey stages report 41% lower fraud losses than organizations with comparatively limited measures.
Download the study now.
There’s also a need to employ more digital identity and behavior data and analysis to enable safer and more efficient remote digital interactions and transactions.
Balance is key: Best results come from a multi-layered approach capable of adapting to the potential risk of each transaction. Organizations that build a broad net of defense against fraud throughout customer journey stages report 41% lower fraud losses than organizations with comparatively limited measures.
Download the study now.
Insights From Past Financial Services and Lending Study
LexisNexis and the Knowledge Burst logo are registered trademarks of RELX Inc., used under license. LexisNexis Fraud Multiplier is a service mark of RELX Inc. ThreatMetrix is a registered trademark of ThreatMetrix, Inc. True Cost of Fraud is a trademark of LexisNexis Risk Solutions Inc.
Products You May Be Interested In
-
BehavioSec®
Transform human interactions into actionable intelligence
Learn More -
FraudPoint®
Combat identity fraud with sophisticated scoring and leading analytics
Learn More -
InstantID® Q&A
Authenticate customer identities in real-time
Learn More -
LexisNexis® Emailage®
Get a clear picture of who is behind a transaction and the associated risk, so your team can automate decision workflows, improve customer experience, all in near-real time
Learn More -
LexisNexis® Fraud Intelligence
LexisNexis® Fraud Intelligence predicts the likelihood a new application will result in fraud
Learn More -
One Time Password
Authenticate a user with a one-time login transaction
Learn More -
Phone Finder
Connect phones and identities with rank-ordered results
Learn More -
ThreatMetrix®
Enable cybersecurity and risk management through data science innovation and shared intelligence
Learn More -
TrueID®
Recognize a true identity and fight fraud in real time
Learn More