B2B Payments

SMEs’ $3B Security Blunder

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Small businesses are increasingly targeted by cyberthieves looking for easy prey. A new report from JAVELIN has uncovered the price of being an easy target.

According to researchers, small businesses lost an average of more than $12,000 in 2015 due to back-office fraud. That can mean fraudulent payments made using a business credit card, a compromise of payroll systems or unauthorized ACH and wire transfers.

Collectively, analysts said the financial impact amounted to $3.1 billion in losses last year, according to JAVELIN’s 2016 Small Business Fraud Report: Small Businesses are Big Targets for Fraudsters.

The report was released on Tuesday (May 3).

JAVELIN pointed to the mistakes that SMEs are making as a key concern for this fraud. According to researchers, just one in four of the businesses surveyed said they use anti-fraud alerts, a tactic the company said was one of the most effective ways of preventing fraud.

“Other fraud safeguards have much lower adoption among small businesses,” JAVELIN said in its announcement, adding that this could either mean that their banks aren’t offering these solutions or that small business owners are unaware of how vulnerable they are and how effective these tools can be.

“While small and microbusinesses are not known for their stellar security posture, there are new and exciting tools available to help in the detection of fraud and assist in better authentication, prevention,” said JAVELIN Research Director and Head of Fraud and Security Al Pascual in a statement.

The situation is improving, the executive added.

“Banks are beginning to provide biometric and behaviormetric technologies [a breed of behavior analytics solutions] to their business customers,” he said. “There is still the hurdle of educating the market before adoption will be seen.”

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The September 2019 AML/KYC Tracker Report provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

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