Annual national study gathers insights from more than 800 Fraud Mitigation Professionals
LexisNexis Risk Solutions today released its annual LexisNexis Fraud Mitigation Study, indicating 84 percent of fraud mitigation professionals see cross-industry fraud in some of their cases and 76 percent of these cross-industry fraud cases have a moderate to high financial impact. The study of more than 800 fraud mitigation professionals reinforces that cross- or multi-industry fraud exists and confirms its significant effect across financial services, insurance, health care, retail, communications and government.
Cross-industry fraud is defined by a fraud case where the perpetrator’s activity touches multiple industries and organizations, habitually exploiting system gaps. For example, a fraudster might commit claims fraud against an auto insurer and also commit government benefits fraud or banking fraud.
“LexisNexis conducted this research to shed light on a problem that as a society we have not collectively addressed, but that is a financial and reputational exposure for organizations,” said Bill Madison, CEO, Insurance, LexisNexis Risk Solutions. “A quarter of professionals say they see cross-industry fraud in over half of their cases. Through these studies, we’re validating the challenge and gaining insight into the nature of fraud that isn’t limited to one market. We can then create a more holistic picture of fraud and formulate strategies outside of our current silos to address it.”
Eighty-two percent of respondents have some direct involvement in fraud mitigation programs, while the remaining respondents have oversight of these programs. Almost half of companies responding spend more than $500,000 annually on fraud mitigation vendors, and over half of the professionals indicate that cross-industry fraud has extreme/high impact on their organizations. Over a quarter (29 percent) of fraud mitigation professionals see cross-industry fraud as having a larger impact than within-industry fraud, while nearly two-thirds (63 percent) see cross-industry fraud as creating at least an equal impact.
Fraud investigators say that known fraud data is highly valuable, and in the fight against fraud, other key findings also include:
- 84 percent of respondents believe access to within-industry data on fraud would be valuable, and 75 percent see access to cross-industry data as valuable.
- 89 percent see value in having a universal and consistent way of describing fraud across industries.
- Three quarters of respondents are using data analytics solutions somewhat or very frequently for fraud mitigation in their organizations, mostly driven by the need for compliance and a desire for accuracy.
The LexisNexis Fraud Defense Network commissioned the national study to gain insights about how frequently fraud mitigation professionals encounter fraud cases from other companies and industries, and to understand how these professionals are using data analytics solutions for fraud detection. The research was conducted in two phases over the course of a year, and closed in April 2016. It included 800 participants from financial services, insurance, health care, retail and government organizations.