The Enemy at the Gates: Payments Fraud is a Symptom

  • ID: 4088986
  • Report
  • Region: United States
  • 18 Pages
  • Mercator Advisory Group
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Payments Fraud is One Clear Symptom of the Greater Cyber Threats now Plaguing the Industrialized World

Cybercrime is a global and growing phenomenon tied to a combination of factors that includes the new era of global economic interdependency along with rapidly changing technology, creating opportunities for criminals to find new and often faster ways to defraud businesses of all sizes. Data breaches will inevitably lead to follow-on activities that take advantage of people, holes in processes, and cracks in systems to transfer wealth from legitimate sources to fraudsters across the globe. A range of activities can be undertaken by companies to create better protective cover around organizational data and prevent or limit the damage from payments fraud.

In a new research report, The Enemy at the Gates: Payments Fraud Is a Symptom, the author discusses the increased cyber threat faced by financial institutions and their clients and how that helps to create opportunities for payments fraud schemes. Payments fraud is a symptom of the broader issue of cybercrime, but it can also be somewhat independently controlled or minimized.

In this report the author reviews the underlying issues around the global fraud threat and their relation to payments fraud and identifies actions that financial institutions and their clients can take to help manage the threat going forward.

"The cost of dealing with fraud incidents goes beyond the actual financial loss, with aftershocks ranging from client dissatisfaction to damaging reputational hits, something of particular concern to financial institutions given follow-on regulatory actions," commented Steve Murphy, Director of Commercial and Enterprise Payments Advisory Service and author of the report. "Managing the threat requires a series of actions including process controls and systems deployment to identify, prevent, and limit the damage."

Highlights of the report include:

  • Reasons for the increased cyber threat and resulting potential economic impact
  • A discussion of the extra costs associated with data breaches, going beyond actual financial losses
  • Trends in payments fraud and reasons for the recent incidence uptick
  • A view of the vendor landscape of technology and services solution providers
  • Methods that companies can use to combat payments fraud, including using external partners.
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1. Executive Summary

2. Introduction

3. The Cyber Threat

  • Cybercrime and Data Breaches
  • Corporate Payments Fraud

4. The Sources of Fraud Activity

  • Not Just an External Threat

5. Payments Fraud Types

  • Checks
  • Wires
  • Commercial Cards
  • ACH
  • Business Email Compromise (BEC)

6. Protecting the Keys to the Kingdom

  • Overall Cybersecurity
  • Payment Fraud Detection and Prevention

7. Conclusions

  • Endnotes

List of Tables & Figures

Figure 1: Companies’ Cost of Data Breach Measures
Figure 2: Percentage of U.S. Organizations That Experienced Actual or Attempted Payments Fraud, 2005-2015
Figure 3: Percentage of Companies Subject to Actual or Attempted Fraud by Type of Payment in 2015
Figure 4: Cyber Attacks Are Now Commonplace
Table 1: Vendor Sampler for Security Technology and Services
Table 2: Payments Fraud Reduction Checklist

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  • ACI
  • BAE Systems
  • CSC
  • Cisco
  • CyberSource
  • Experian
  • FICO
  • FIS
  • Fiserv
  • Guardian Analytics
  • HPE
  • IBM
  • Intel
  • Microsoft
  • Verizon
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