Around 48 per cent of small and medium-sized businesses believe they are too small to be a target for fraudsters, a report from Emailage claims.
Emailage conducted a study of 1,000 people in leadership roles in SMBs, including owners, executives, and senior and management members, in organisations across the US and Canada.
The ‘Why fraud prevention is a strategic investment for businesses of all sizes’ report has found 48 per cent of SMBs think they are too small for attacks, and 58 per cent believe they are less susceptible to online fraud than lager organisations.
While there is this aversion to the risk, fraud was a big threat felt by the organisations, with 80 per cent stating it was their most pressing priority, and 31 per cent claiming they are experiencing more fraud than ever.
The report states, “These attitudes are understandable. It’s easy for SMBs to think that they can fly under the radar while fraudsters target bigger, higher-value competitors. And when time and resources are stretched (as they are for so many smaller businesses) it is perhaps inevitable that fraud prevention will slip down the priority list.
“However, beware of this false sense of security. Today’s clear and present threats mean fraud prevention is not a nice-to-have, it’s essential. SMBs with an online presence are a target, even if they don’t believe themselves to be. For smaller companies the risks are arguably greater, as a single breach could deliver a crippling monetary or reputational blow. Prevention is better than a cure.”
In the study, it states that around 23 per cent of businesses have been hit by fraud and over the past 12 months the average revenue loss in the US was $28,313 and CAD $12,844 in Canada. According to the respondents, the smallest businesses were hit the worst, with companies with employee numbers between 10 and 49 lost around $37,258 on average.
One key reason for not implementing enough defence was the amount of employee time is needed to detect fraud and respond to threats, with 40 per cent of respondents making the statement.
The study claims that 2 in 5 had fraud prevention as a top priority, however, as much as 13 per cent of businesses had no fraud prevention systems at all. Further to this, only 50 per cent of SMBs had a dedicated team to monitor fraud.
Of those to use protection solutions email verification tools were the most widely used with just under 40 per cent having these measures in place. Other services in action include third-party payment processor, IP address tracker, ban on fraudulent accounts, and reconcile of daily accounts.
Emailage develops fraud prevention and digital identity intelligence software for emails.
Copyright © 2018 RegTech Analyst
