Fraud Costs and Volumes Remain Significantly Higher than Pre-Pandemic for Financial Services and Lending Firms, According to New LexisNexis Risk Solutions Report

ATLANTA, Jan. 6, 2022 /PRNewswire/ -- LexisNexis® Risk Solutions today released the 2021 edition of the LexisNexis® True Cost of Fraud™ Study: Financial Services & Lending, the 5th edition of the report. The study examines fraud trends for the United States and Canadian financial services and lending sectors and key pain points related to adding new payment mechanisms, transacting through online and mobile channels and international expansion. This edition is based on responses from more than 500 risk and fraud management executives in August and September 2021 and reveals that fraud costs and attack volumes remain significantly higher compared to before the pandemic. U.S. banks and mortgage lenders are experiencing much of the increase in both areas, as is the mobile channel.

The cost of fraud for U.S. financial services and lending firms has increased between 6.7% and 9.9% compared with before the pandemic. Every $1 of fraud loss now costs U.S. financial services firms $4.00, compared to $3.25 in 2019 and $3.64 in 2020. While the LexisNexis Fraud Multiplier™ is slightly less for Canadian financial services firms, they have experienced a sharper year-over-year rise of 15.5%. The LexisNexis Fraud Multiplier for U.S. lenders is now $4.16, compared to $3.90 in early 2020 and $4.00 for Canadian lenders, up 12.4% prior to the pandemic.

Fraud Trends in Financial Services and Lending

• For banks, balancing fraud detection with customer friction is a top challenge alongside new account openings and account logins, while identifying malicious bots and the transaction origination are more concerning at funds distribution.
• Mortgage lenders tend to rank balancing fraud detection with customer friction, identifying malicious bots and knowing the transaction origination as top challenges across the customer journey. They are also more likely than other respondents to include a lack of tools to detect and prevent cross border fraud, especially with account takeover.

"The foreseeable future is unclear about the new normal. With the accelerated movement to online/mobile transactions and payments, financial services and lending firms must continue to build out and enhance the digital customer experience while protecting against fraud," said Christopher Schnieper, director of fraud and identity, LexisNexis Risk Solutions.

"Fraud prevention must assess both physical and digital identity attributes as well as the risk of the transaction. It is difficult for even the best trained professional to detect the increasingly sophisticated crime occurring in the remote digital channels without the aid of solutions that detect digital behaviors, anomalies, device risk and synthetic identities," Schnieper continued. "According to the study, the financial services and lending firms doing this – along with fully integrating cybersecurity operations, the digital customer experience and fraud prevention – tend to have a lower cost of fraud and fewer challenges."

Methodology
The report's findings stem from an extensive survey of 502 risk and fraud management executives in financial services and lending companies, including retail and commercial banks, credit unions, firms, trusts and wealth management, as well as auto lenders, mortgage companies, finance companies, and non-bank credit card and personal loan issuers.

Download the LexisNexis® True Cost of Fraud™ Study: Financial Services & Lending.

About LexisNexis Risk Solutions 
LexisNexis® Risk Solutions harnesses the power of data and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. We provide data and technology solutions for a wide range of industries including insurance, financial services, healthcare and government. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information-based analytics and decision tools for professional and business customers. For more information, please visit www.risk.lexisnexis.com and www.relx.com.

LexisNexis and the Knowledge Burst logo are registered trademarks and LexisNexis Fraud Multiplier is a trademark of RELX Inc. True Cost of Fraud is a trademark of LexisNexis Risk Solutions Inc. Other products and services may be trademarks or registered trademarks of their respective companies. Copyright © 2021 LexisNexis Risk Solutions Group.

Media Contact:
Marcy Theobald
678.232.0948
Marcy.Theobald@lexisnexisrisk.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/fraud-costs-and-volumes-remain-significantly-higher-than-pre-pandemic-for-financial-services-and-lending-firms-according-to-new-lexisnexis-risk-solutions-report-301455203.html

SOURCE LexisNexis Risk Solutions