European business leaders predict increase in fraud rates

29th November 2023

A new report by Lenvi Riskfactor has found that almost nine out of ten (89%) European business leaders have noted an increase in fraudulent activity against their businesses in the past year; with more than eight in ten (81%) expecting a continued increase through the current financial year (2023/24).

This issue is compounded by the perception that fraud is becoming even more sophisticated – a trend reported by almost three-quarters (73%) of all responding receivables finance lenders. As a result, lenders are increasing their budgets for fraud prevention, by an average of 39% year-on-year.

In spite of this, even the lenders with the highest confidence in their fraud prevention abilities – some 40% of respondents – estimate that they fail to detect one in every four fraud attempts made against them. Nearly a third (30%) of lenders believe they were unable to detect half of all fraudulent activity in the past year.
Looking ahead to the remainder of the financial year, 70% of all receivables finance lenders recognise fraud to be a significant risk for their business; with this figure rising to 83% for lenders with less than 250 employees.

Whilst increased spend on fraud prevention does little to mitigate concerns, there is a clear link between a lender’s adoption of technology and the extent to which their business is concerned by the threat of fraud. 84% of lenders with a predominantly manual-led approach to fraud prevention note fraud to be a significant or high risk, dropping to 70% among lenders with a technology-led approach, and 66% for those firms utilising a blended strategy.

Ahmed Amin, Lenvi Riskfactor Sales Director said “Whatever strategy lenders deploy to try to address and repel the growing threat of fraud, this is no time for complacency. Instead, companies need to develop and refine approaches to fraud prevention, based on an effective combination of technology solutions and human expertise – and a willingness at the top of the business to take responsibility for addressing and mitigating fraud risks. Businesses in the receivables finance industry will need to be diligent and endlessly watchful if they are to continue to protect themselves and their customers from fraud risks in the years to come.”