June 14, 2017
Rising fraud costs inhibit corporate finance plans for innovation, growth: Vesta report
Nearly sixty per cent of corporate finance leaders expect to change fraud-fighting strategies in next two years
PORTLAND, Ore. -- Today's senior finance executives are battling record levels of fraud, in turn narrowing corporate focus and limiting resources that could otherwise be devoted to innovation, planning, budgeting and compliance. That's according to "Managing the Risk of Fraud: The View from Corporate Finance," a new report published today by Vesta Corporation, a global leader in integrated risk and payment solutions, and CFO Research. The organizations surveyed 155 U.S. senior finance executives to assess their experience with and expectations for fighting fraud, which have only intensified in recent years.
62 per cent of respondents (including 55 per cent of respondents with a CFO title) had seen both the number and dollar amount of credit card chargebacks increase since the introduction of EMV chip cards. Furthermore, 64 per cent of those surveyed (including 62 per cent of CFO-titled respondents) measured increases in both the number and dollar amount of credit card chargebacks specifically related to "card not present" (CNP) transactions since the introduction of EMV chip cards.
"As merchants have upgraded in-store payment security measures, fraudsters have flocked to CNP channels—online, mobile and elsewhere—with stolen payment credentials and seriously harmed merchants' growth potential," explained Tom Byrnes, Vesta's chief marketing officer.
Forty-three per cent of corporate finance executives (or 33 per cent of CFOs) confirmed that fraud risk has interfered with corporate efforts to develop new products or services or even caused business model changes. Perhaps more challenging, 43 per cent (or 36 per cent of CFOs) reported fraud risk interfering with corporate budget allocation or revenue projections. As such, 56 per cent anticipate their fraud detection and assessment strategies to change in the next two years.
"Unfortunately, fraud risks are distracting merchants from focusing on what they do best: innovating and satisfying customers to boost revenue and grow their businesses," added Byrnes.
Visitors can download a copy of the "Managing the Risk of Fraud: The View from Corporate Finance" eBook for free.