Payments fraud has declined but continues to pose a serious problem for FinTechs, AFP finds

As digital payment fraud continues to shoot up, business email compromise (BEC) has been the most common source of fraud attempts, says new report from Association for Financial Professionals (AFP).

The report, which was underwritten by JP Morgan, found that 76% of the 500 treasury and finance professionals surveyed reported that their organisations were targeted by BEC attempts in 2020 compared to 75% in 2019 and 80% in 2018.

Furthermore, 62% of companies that experienced attempted as well as actual payments fraud in 2020 did so as a result of BEC. In specific, the accounts departments are the most susceptible to BEC fraud, 61% of those surveyed said.

While BEC was a primary source of fraud, 74% of organisations surveyed were targeted by scammers in 2020. While that is smaller than figures reported in 2018 and 2019 which were 82% and 81% respectively, it still indicates that a large percentage of companies continue to be impacted by payment fraud.

Checks and wire transfers were the most vulnerable payment methods used by hackers, the report showed.

Delving on the reason for the escalating cyber threats, two-thirds of respondents admitted that the COVID-19 pandemic is to blame for some of the uptick in payments fraud at their companies.

To tackle the issue, employees must be educated on the threat of BEC and trained to identify spear-phishing attempts, 77% of the financial professionals said.

Commenting on the new research, AFP CEO Jim Kaitz said, “While the COVID-19 pandemic has certainly impacted how organizations 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. 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.”

Echoing a similar sentiment, JP Morgan head of product delivery Sue Dean said that raising awareness among employees is paramount. She said, “We’ve seen companies of all sizes across industries shift how they work, manage payments and move money over the last year. 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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