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UK businesses are among the most concerned with fraud in Europe. However, they are also the most confident that their defences remain one step ahead of fraudsters.
Financial services risk management software provider Lenvi Riskfactor has surveyed 207 senior decision makers with influence and involvement in credit facility services, working for businesses in France, Germany, Spain, and the UK. The study reveals a detailed picture of how fraud has affected receivables finance lenders in recent years, how it might affect them in the future, and how strategies to prevent fraud are being developed in four key European markets: the UK, France, Spain, and Germany.
The headline result finds that 89% of respondents across the four markets noted an increase in fraudulent activity against their businesses in the last year. At the same time, 81% expecting a continued increase through the current financial year. But some markets have been hit harder than others, while some are also a good deal better prepared.
Source: Lenvi Riskfactor
Of all respondents, 32% said they had seen ‘considerable increases’ in fraud in the current financial year – peaking in Spain, where 54% said as much. The country was the only one polled to have a majority of respondents say the situation was changing considerably – while the UK and Germany saw lower portions of 26% and 13% respectively.
This may in part be due to a reluctance in Spain to invest in technological anti-fraud mechanisms. Over the coming 12 months, 57% of Spanish respondents said they would be relying more heavily on manual input for their fraud prevention. At the same time, they would be increasing just 17% of their reliance in technology – in contrast to the UK, where the most businesses will be investing in technological defences, on 55%.
Investing more heavily in technology to see off fraudsters may be behind why UK respondents seem less concerned with the ‘sophistication’ of fraudsters. Proportional to their own defences, 65% of UK businesses believed fraudulent actors were becoming more sophisticated. While this is still high, it is much less than the 80% seen in Spain and France.
Source: Lenvi Riskfactor
Even so, on the whole, European businesses are confident in their ability to prevent fraud. Four-in-ten companies said they had successfully identified and blocked more than 75% of fraudulent activity. But again, some are performing better than others. Considering the nation’s belief that fraudsters are not becoming that much more sophisticated in their efforts, it might not come as a surprise that the UK leads the way on this front.
A 49% chunk of UK businesses said they prevented more than three-quarters of attacks on their firm. Spain followed closest behind on 40%, but in contrast, Germany lagged behind by some distance – on just 32%. But as positive as the performance of UK businesses against hostile actors might be, the researchers also issued a note of caution.
Ahmed Amin, Lenvi Riskfactor Sales Director, commented, “Whatever strategy lenders deploy to try to address and repel the growing threat of fraud, this is no time for complacency. Instead, companies need to develop and refine approaches to fraud prevention, based on an effective combination of technology solutions and human expertise – and a willingness at the top of the business to take responsibility for addressing and mitigating fraud risks. Businesses in the receivables finance industry will need to be diligent and endlessly watchful if they are to continue to protect themselves and their customers from fraud risks in the years to come.”
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