Financial Industry Anticipates Payment Fraud Spike

The majority of financial professionals worry that payments fraud will emerge as a major threat to their industry over the next two- to three years, according to a new report.

Nearly 90% of respondents to a recent TD Bank survey believe payments fraud will become a bigger threat to the financial services sector over the next two- to three years. Just 9% of respondents believed the threat will be under control relatively soon.

The financial industry has begun the shift to electronic payments: one in five respondents say their companies currently conduct them. Meanwhile, 32% of respondents say they expect to implement electronic payments in their companies within the next one to two years, and nearly 49% of respondents believe faster, or real-time payment processing is critical for their business. While faster payment processing may make their customers happy, the organizations may not be prepared for the security risks.

“The faster payments move, the riskier they become,” says Rick Burke, head of corporate products and services at TD Bank. “Organizations need to lean on their financial institutions to educate corporate treasurers and financial professionals on strategies to detect fraud and provide solutions to appropriately manage risk.”

The survey also found that nearly 60% of respondents want banking partners to help protect financial and data assets from theft by cybercriminals in the coming year.

Michael Orozco, managing director of cybersecurity and risk management in financial services at Accenture Strategy and co-author of a recent report on cyber risk in the financial industry, says advances in digital services are outpacing advancements in security. 

“With the continued investment and rush into digital capabilities, surprisingly, organizations are aware that the digital requirements are what’s really essential to continue to deepening and expanding customer relations, but it’s also providing an exposure to increased vulnerabilities,” Orozco says.

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