Invoice fraud can hit anywhere, from large multinationals to SMEs, from China to the U.S. But a new report from Tungsten Network says the threat is particularly acute in one particular sector — with some big ramifications.
According to the research, published Tuesday (April 26), more than $240 million in losses hits U.K. financial services businesses every year, with one-fifth of companies surveyed suspecting that invoice fraud has cost around $7,300 in the last year.
The financial services industry is seeing a greater volume of invoice fraud, Tungsten found, with 61 percent of FS companies surveyed perceiving this as the biggest threat to their business. More than half (58 percent) of companies in this industry said they are concerned about the rise in cybercrime, greater than the national average of 54 percent, said reports.
Six out of 10 financial services firms said they had received a fake invoice n the last year — “significantly more,” Tungsten stated, than the average of 47 percent across all industries in the U.K.
“Considering all the challenges firms face every day, it’s telling that cybercrime looms so large,” said Tungsten CEO Richard Hurwitz in a statement. “The FS industry seems particularly attuned to the threat, which is good, but there are steps they can take to protect themselves.”
The executive concluded that technology, including digital invoicing tools, can help companies identify and avoid invoice fraud. Suppliers that upload electronic invoices can have them validated before they are paid, added Hurwitz.
Tungsten also pointed to the need for U.K. regulators to crack down on invoice fraud, reports said. Earlier this year, officials created the Joint Fraud Taskforce to combat fraud in the consumer space; Tungsten said its research highlights the need for this group to also focus on B2B fraud, especially in the financial services space.
“It is important that employees are made aware of invoice scams and are ready to recognize the signs of fraud,” said Head of Action Fraud Pauline Smith in a statement. “Incidents of invoice fraud are underreported, and therefore, it is difficult to know the true scale of this fraud type. However, what we do know is that this type of fraud prevails across all types of businesses, and no one type of industry is immune.”