While internal fraud increases in times of financial turmoil, at the same time executives at financial services firms are increasing the technology they deploy against it. Nonetheless, executives believe internal fraud will only worsen, according to a new report released on Monday by the Aite Group.
In November and December, Aite Group surveyed 35 fraud and product executives at financial institutions across the United States and Canada, finding that over half of financial services firms surveyed attribute at least 5% of their total fraud losses to internal fraud, at a cost of hundreds of millions of dollars. Even though fraud is a significant problem, the truth is most financial services firms don’t want to discuss it given that their business is built on trust in their brand. As a result, 35% of survey respondents reported prosecuting 10% or less of their confirmed internal fraud cases.
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