LexisNexis Report Highlights Growing Concerns Over Fraudulent Activities Impacting Businesses
A recent survey conducted by LexisNexis Risk Solutions has shed light on the increasing prevalence of fraud within the business landscape of the UAE. According to the survey, 42 per cent of companies in the UAE reported a rise in fraudulent activities, signaling a growing concern among businesses in the region.
The findings, unveiled as part of the LexisNexis True Cost of Fraud™ Study – Europe, Middle East and Africa, underscore the significant financial burden imposed by fraudulent transactions on UAE organizations. On average, UAE businesses incurred a cost of Dh4.19 for every dirham lost to fraud, encompassing financial losses, internal labor expenses, external costs, and other associated expenses.
The study revealed that rapid digitization, particularly the widespread adoption of digital payment methods, has not only enhanced payment experiences but has also exposed businesses to more sophisticated and innovative fraud attacks. Digital channels accounted for 52 per cent of overall fraud losses across Europe, the Middle East, and Africa, surpassing physical fraud for the first time. Cybercriminals are exploiting the anonymity of digital transactions to execute fast and untraceable fraud, aided by technologies such as artificial intelligence.
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Furthermore, the report highlighted the evolving tactics employed by criminals, with synthetic identities emerging as a primary challenge in customer identity verification. Fraud not only imposes financial losses but also impacts operational efficiency, customer trust, and reputation, placing significant pressure on businesses.
Jason Lane-Sellers, Director of Fraud and Identity, EMEA at LexisNexis Risk Solutions, emphasized the need for a multi-layered approach to fraud prevention throughout the customer journey. He stressed the importance of balancing fraud prevention measures with maintaining a positive customer experience to mitigate the broader impacts on companies’ bottom lines.
The study also revealed the profound impact of fraud on customer satisfaction and conversion rates in the UAE, underscoring the need for businesses to adopt forward-thinking fraud management and authentication solutions. Leveraging technologies such as AI, machine learning, and biometric authentication methods is crucial in mitigating the escalating threat of fraud and cybersecurity risks.
The report, based on a survey of 55 fraud management decision-makers in the UAE and 1,845 globally, provides valuable insights into the current state of fraud and the challenges associated with digital payments in emerging markets.
