Today, LexisNexis Risk Solutions released its annual LexisNexis Fraud Mitigation Study, which found that people who commit fraud in one industry are increasingly emboldened to exploit other industries, too, giving organizations greater incentive to fight fraud cooperatively by sharing fraud data.
The third-annual study surveyed more than 800 fraud mitigation professionals from financial services, insurance, health care, retail, communications and government to gauge trends and patterns related to fraud. It found that cross-industry fraud is widespread, with 84 percent of professionals saying that some fraud cases they investigated were connected to other industries. An insurance fraud scheme to stage an auto accident, for example, could also see the perpetrator exploit system gaps to fraudulently claim government benefits or participate in telecommunications, retail or payment card fraud.
The fact that fraud often touches multiple industries creates a tricky scenario for government officials tasked with helping to maintain security. As industries share security data, it will be important to maintain privacy. Cross-industry efforts to add security measures may also make user experience suffer as hardened security often results in frustrating processes and transactions.
“Fraud has become more pervasive and costly over time, and today’s criminals are more sophisticated than ever, with an increasing number of fraud schemes affecting multiple organizations across multiple industries,” said Bill Madison, CEO, Insurance, LexisNexis Risk Solutions.
Respondents from several industry groups said they would be willing to share data and potentially make some sacrifices in user experience to improve security. Those from government, insurance, and financial services industries, in particular, noted the growing cost of fraud.
43 percent of government executives said that identity theft was their top concern – an issue that catapulted onto the front pages last month with the Equifax breach.
Government officials along with executives in financial services and insurance are also considering ways of blocking suspicious transactions if it appears that someone’s identity or accounts have been breached. 50 percent of government respondents said they are most likely to invest in blocking suspicious transactions in the future. Those in government said that in addition to transaction blocking technology, they would also be investing more in new staff positions and security training.
The full report is available here.