Ireland-based Norkom Technologies says bankers throughout the world expect their institutions' vulnerability to fraud to increase, as many have cut back on their investments in technology and fraud detection.
Based on the results of the survey, which included responses from 250 crime professionals employed by banks throughout the world, Norkom put together a research report called "Fighting crime — defending the bottom line." Respondents to the survey came from retail banks, commercial banks and integrated financial-services companies. Forty-one percent of the organizations polled had assets between U.S. $10 billion and U.S. $500 billion; 12 percent had assets exceeding U.S. $500 billion.
According to a news release issued by Norkom, respondents said budgetary cuts to their departmental spending plans have weakened their ability to keep pace with increases in criminal attacks. Seventy-one percent said fraud attacks against their business have increased over the past year in number and severity. And 67 percent said their financial losses to fraud have grown over the same period. For 22 percent of the respondents, the number of fraudulent incidents and the losses to fraud have increased more than one-fifth over the last 12 months.
A third of the respondents also said they have seen their financial crime-prevention budgets cut, and 50 percent agreed that general cost-cutting across their organizations has weakened their defenses.
David Dixon, Norkom's director of global solutions, says the increased exposure to fraud is ironic, since so many banks have identified fraud reduction as a top priority:
It's ironic that the very actions banks are taking to shore up their damaged finances may sabotage their chances of recovery. However, we do see a path out of the dilemma. There is clear evidence that advanced crime-fighting approaches, underpinned by consolidated technologies, can reduce fraud losses and simultaneously reduce operating costs in crime-fighting departments.
Last year, Norkom's survey found 64 percent of organizations had reduced operating costs by up to 30 percent when they implemented consolidated crime-fighting technologies. Sixty-six percent also said their ability to detect crime had improved by up to 40 percent. And 79 percent of respondents said using a consolidated-technology approach allowed them to improve their "percentage of fraud detected" performance (the amount of fraud detected and prevented as a proportion of total fraud reported to them by their customers). Sixty-three percent also saw their operating costs decrease.
