Payment fraud has emerged as one of the most significant threats facing companies worldwide, with losses amounting to billions of dollars. More than two-thirds of US corporate finance departments have reported various forms of breaches over the past year, resulting in both financial losses and severe damage to their reputation.
These findings were released on Wednesday in a comprehensive report by Creednz, a platform dedicated to safeguarding corporate finance teams from payment scams, in collaboration with the Ponemon Institute, led by Dr. Larry Ponemon, former senior partner at PWC and an expert in global compliance risk management.
Rampant Payment Transaction Fraud:
An alarming revelation from the report is that a staggering 88% of respondents disclosed that their organizations had experienced at least one payment transaction fraud within the last two years. This finding underscores the pervasive nature of payment fraud in the corporate world, affecting a vast majority of businesses regardless of their size or industry.
Furthermore, the report shows that 76% of those surveyed revealed that it took more than a month, and in some cases, over a year, to identify and address these fraudulent incidents. This delayed response time illustrates the need for more proactive and efficient fraud detection mechanisms within corporate finance departments to minimize financial damage and reputational harm.
Reputation Takes a Hit:
The aftermath of a payment fraud incident is primarily characterized by reputational damage, noted the report. A substantial 60% of respondents reported a negative impact on their reputation and brand following such incidents; the consequences of such events have the potential to be both long-lasting and irreversible.
Employee Fallout:
Lastly, the report highlights the human toll of payment fraud within organizations. More than a quarter of respondents admitted to terminating employees responsible for fraudulent payments, shedding light on the vulnerability of manual payment processing to human error. With this in mind, companies are motivated to invest in technologies and processes that reduce the margin for such errors and protect both their finances and their workforce.
Creednz Co-founder and CEO, Johnny Deutsch, highlighted the critical need for technological intervention in protecting both companies and employees. “A manual process leads to fraud, and those that get blamed are the ones who literally clicked the ‘send’ button. It makes no sense in today’s world that technology isn’t being utilized and applied to prevent this in the first place,” he said.
“Creednz was built from the ground up to give finance teams the tools to fight back and protect against payment fraud and safeguarding corporate finances,” Deutsch added.
Dr. Larry Ponemon, the founder of the Ponemon Institute and co-author of the report, emphasized the transformative impact of their research, stating: “Our research revolutionizes this landscape by providing valuable insights for companies to recalibrate their risk focus.By shedding light on the accountability aspects of payment scams, we bridge the gap between finance and cybersecurity departments, revealing how these financial challenges squarely fall within the purview of corporate finance.”
Creednz has successfully concluded a $7 million fundraising round led by Blumberg Capital, with participation from Elron Ventures and Moneta VC. These funds will be utilized to expand the team, further develop their product, and establish a stronger presence in the market.