Economic crimes have been plaguing the Financial Industry with increasing cost each year. The PricewaterhouseCooper global economic crime survey for 2016 suggests that about 36% of organizations have experienced crime. Failing to properly identify and prevent fraud is an expensive proposition that costs the financial industry billions of dollars per year. In 2011, fraud stemming from economic crimes, cost the financial industry approximately $80 billion and U.S. credit and debit card issuers alone lost $2.
4 billion. A recent Nilson Report estimates that worldwide losses due to credit card fraud alone would top $27.69 billion in 2017, increasing 11 percent over the previous year. While the financial impact for institutions can be significant in monetary terms, the experience, for individual victims of fraud can be costly and even lead to identity theft, which can take years to resolve. Retail Industry is one of the most affected industries for fraud with Point-of-Sale systems being most vulnerable to fraud.
To combat this, Loss Prevention departments of many retail stores have installed Close-Circuit-Television for monitoring and recording fraudulent activities. The advent of increased technology adoption and Internet has fueled these crimes, with more opportunity for theft and misuse of credit card and Personal Credit Information (PCI) data. Advancements in software technologies and the growing use of e-commerce platforms have exponentially increased the risk of fraud for financial services companies and their customers. The internet has become the busiest ordering place in the world for everything under the sun – from food to electronics to hotel and travel reservations. The opportunity to do business is immense for retailers that offer delivery of goods online, but the potential for fraud is several times higher than retailers in brick-and-mortar stores.
According to a survey, Pymts.com estimates that online fraud accounted for 3.4 percent of all e-commerce sales in the 3rd quarter of 2015, and about 2.1 percent of all transactions.