That Fraud Challenge is Bigger Than You Think
We often talk about the challenges of fraud at Neural Technologies, and our work with customers to deploy our portfolio of advanced solutions designed to tackle it.
Preventing revenue losses due to fraud is a critical priority for any business, and essential if organizations are to protect customers, reduce leakage, and avoid any potential penalties from regulators.
When it comes to fraud, the reported impact is huge.The Risk and Assurance Group (RAG) RAFM Survey 2020 estimates fraud costs customers of communication service providers (CSPs) USD48bil annually. We shouldn’t get lost in that eye-watering aggregate cost and forget the very real personal impact fraud has on customers.
The estimated cost of fraud on a global scale is even more remarkable. The Financial Cost of Fraud 2019 report developed by legal and auditing firm Crowe in partnership with the Centre for Counter Fraud Studies at the University of Portsmouth estimates fraud is costing the global economy over USD5 trillion annually—an increase of 56% in just a decade.
Yet fraud remains a complex and often challenging crime to accurately assess. Even these devastating trillion-dollar estimates may be missing the true picture. As businesses, it’s important to recognise that the cost of fraud might be bigger than you think.
The uncounted cost of fraud
Fraud is an often complex crime, and one which evidence indicates may be significantly underreported. The United Kingdom’s Office of National Statistics (ONS) suggests that just 16.6% of fraud offences are reported in the UK. That’s a staggering gap between potential legal action and the impact on individuals.
These estimates are backed by figures from the National Crime Agency, which indicates just one in five fraud cases are reported. This is particularly worrying at a time when COVID-19 is triggering a new wave of fraud attempts, with GBP34.5 million lost to COVID-related fraud and cybercrime recorded in England and Wales.
Such challenges are not unique to the UK. The United States Department of Justice estimates that just 15% of the nation’s fraud victims report their crimes to law enforcement. This is often because victims feel ashamed or alone, and are reluctant to report having been scammed. With fraudsters often directly targeting more vulnerable groups, this sentiment is challenging to address.
Preventing fraud must be a priority
The significant problem of underreported fraud is why Neural Technologies is leveraging its sophisticated machine learning solutions to tackle persistent fraud threats such as robocalls.
Eliminating fraud attempts before they impact customers is critical if CSPs are to have a genuine impact on fraud, particularly given the serious challenges around how underreported such crimes can be. We recently worked with a leading Asian CSP to implement our advanced Scam Call Mitigation solution in order to tackle scam calls and better protect customers.
Of course the underreported nature of fraud isn’t simply down to the emotional reluctance to admit one has become a victim. The sophisticated nature of fraudsters also means that fraud can go undetected—a particular challenge for businesses working in dynamic and often high-volume environments.
Neural Technologies’ Fraud Management solution protects enterprises from a wide range of fraud types, leveraging sophisticated machine learning and artificial intelligence solutions that identify both established and emerging fraud patterns to provide an effective shield against fraud.
Our portfolio of solutions not only protects customers from scam calls, but also tackles key fraud types such as SIMBox fraud, Wangiri fraud, Dealer fraud, PBX fraud, Subscription fraud and more. With its flexible and highly configurable system, the Optimus Revenue Protection Platform provides an end-to-end fraud solution for customers across a wide range of industries, with automated functionalities fit to tackle a high-volume fraud landscape.
This ability to adapt and identify fraud early on is critical for businesses. We can see across the globe that at the point fraud impacts customers, it’s often too late.
With huge hurdles in the underreporting of fraud, the only truly effective way to tackle this challenge is by identifying threats as they emerge, quickly reacting to eliminate the threat, and ensuring that both customers and businesses are continuously protected through proactive measures.