ATLANTA and LAS VEGAS–Eighty-four percent of fraud mitigation professionals see cross-industry fraud in some of their cases, and 76% of these cross-industry fraud cases have a moderate to high financial impact, according to the annual LexisNexis Fraud Mitigation Study.
The study of more than 800 fraud mitigation specialist reinforces that cross- or multi-industry fraud exists and confirms its significant effect across financial services, insurance, healthcare, retail, communications and government, the company said.
LexisNexis defined cross-industry fraud as 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.”
Of those surveyed, 82% 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. More than a quarter (29%) of fraud mitigation professionals see cross-industry fraud as having a larger impact than within-industry fraud, while nearly two-thirds (63%) see cross-industry fraud as creating at least an equal impact.
Other findings:
- 84% of respondents believe access to within-industry data on fraud would be valuable, and 75% see access to cross-industry data as valuable
- 89% 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