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Colombian Businesses Face Rising Tide of Financial Institution Fraud

Bogotá, Colombia - A New Report Reveals Alarming Trends

A recent report from LexisNexis Risk Solutions has shed light on a growing concern for Colombian businesses: financial institution fraud prevention. According to the 2023 LexisNexis True Cost of Fraud Study – Latin America, 65% of organizations in Colombia have reported an increase in fraud over the past year.

Digital Channels Lead to Higher Fraud Losses

The study highlights that digital channels account for more fraud losses than physical channels across LATAM, with a staggering 51% of overall fraud losses attributed to online transactions. This has led cybercriminals to exploit the anonymity of digital, cross-border transactions to execute fast and untraceable fraud.

Identity Theft and Scams on the Rise

In Colombia specifically, financial institutions incur an average cost of $3.76 for every peso lost to fraud, which includes financial losses due to fraud, internal labor expenses, external costs, legal costs, and recovery fees. The report also emphasizes the growing threat of identity theft and scams in digital banking and commerce, with new account creation being the stage of the customer journey with the highest fraud losses.

Key Findings

• 65% of Colombian organizations reported an increase in fraud over the past year
• Digital channels account for 51% of overall fraud losses across LATAM
• New account creation is the stage of the customer journey with the highest fraud losses, with 46% of financial institutions and 44% of retailers affected
• Financial institutions incur an average cost of $3.76 for every peso lost to fraud

Preventing Fraud Requires a Multi-Layered Approach

“It’s self-evident that new forms of fraud increase the risk of financial losses for consumers and businesses,” said Rafael Costa Abreu, director, fraud and identity, LATAM at LexisNexis Risk Solutions. “Preventing fraud requires leveraging cutting-edge technologies such as AI, machine learning, and biometric and behavior-based authentication methods.”

The Full Report is Available

The full report can be downloaded from LexisNexis Risk Solutions’ website.

About LexisNexis Risk Solutions

LexisNexis Risk Solutions is a global provider of risk management and decision support solutions, harnessing the power of data and sophisticated analytics platforms to provide insights that help businesses and governmental entities reduce risk and improve decisions.