For every dollar of fraud losses consumers incur, financial institutions spend $4 in associated costs. Such significant impacts mean financial institutions and their financial crimes teams in 2023 will need to stay on top of fraud trends in order to mitigate losses.
According to the latest data from the Federal Trade Commission, consumers lost more than $5.8 billion to fraud in 2021, a 70% increase over the prior year. That represents almost 2.8 million fraud victims. And while final numbers are still being calculated for 2022, bankers saw typologies exacerbated by the pandemic provide criminals with avenues for fraud while cryptocurrency scams surfaced more frequently. If history is any indicator, the global economic downturn predicted for 2023 will likely bring increased fraud to businesses and consumers.
"When the economy takes a turn, it boils down to fundamentals. We know that individuals are more likely to commit fraud when normal conditions worsen," said Andi McNeal, Vice President of Education at the Association of Certified Fraud Examiners. A worsening economy can exacerbate conditions that experts refer to as the fraud triangle fundamentals—pressure, opportunity, and rationalization. These conditions can increase the likelihood of fraud—even internally among trusted employees. Current economic indicators do not bode well for fraud stabilization in 2023.
Financial institutions should not expect a slowdown of any of 2022’s fraud trends. Be on the lookout in 2023 for the following trends identified by the Federal Bureau of Investigation.