The reputational cost of fraud and its impact on brand image – the latest figures revealed

• Damage to brand reputations spikes as fraud grows

• Customer loyalty and satisfaction are on the line

• Stock value and staff morale also hit by fraud, further impacting brand image

• Businesses advised to deploy advanced fraud solutions to fight back
  
  
  

Failing to tackle online fraud is increasingly damaging the brand reputation and public image for thousands of businesses around the globe, reveals Ravelin’s Global Fraud Trends 2024 Survey.

Fraud increasingly attracts media coverage

Almost two-thirds of ecommerce brands (61%) have found themselves at the centre of highly damaging media storms when fraud hit. This includes both traditional and social media, where users like to share their impressions around companies, further affecting their public image.

Of those polled, 40% (41% in the UK) say that fraud affects their brand image and reputation, in part owing to the traditional and social media coverage of fraud attacks against companies – including discussions and concerns voiced about whether brands are protecting their customers' accounts and interests from fraud.

This varies by sector, with digital goods particularly affected: 40% of retailers, 36% of those in travel, 45% in digital goods, and 38% in marketplaces reported this type of damage

Moreover, 34.5% of those surveyed saw their company suffer bad press/brand damage in the past 12 months as a result of fraudulent activity. The results of such negative publicity can be devastating for brands with an online commercial presence.

Overall, fraud has increased for 74.8% of companies around the world, with some regions suffering more than others. The UK has seen the biggest increase, at 84%.

Download the full Fraud & Payments Survey 2024 report here – or scroll down for more statistics on the impact of fraud on companies' reputations.

Stock price, brand image, and customer loyalty at stake

Fraud also negatively impacts stock prices according to 20% of respondents while across the board, responders said fraud affected growth the most, at 51.8%.

One in four say they lose over $15m/£12m to fraud yearly, and over half (51.8%) say fraud stifles company growth, leading to broader knock-on impacts.

Customer loyalty also takes a hit for 37% of companies, and can then be amplified by social media, further impacting reputation.

Interestingly, 31% (39% in the UK) cited worries about public image as an obstacle to fighting fraud more efficiently. The key concern was that it adds friction to the customer journey, which impacts loyalty and reputation.

This is a common misconception about fraud prevention.

In reality, with advanced fraud and payments solutions, friction can be dynamic, actually rewarding good customers with a completely frictionless experience while making checkout more cumbersome for those who are suspected of fraud but not certain to be fraudsters. This is in addition to outright blocking obvious fraudsters, of course.

Reputation is everything

Reputational damage from fraud is certainly rearing its ugly head, and we would be wise to pay attention.

Ravelin CEO Martin Sweeney said, commenting on the survey results:

“In a highly connected world where reputations can be globally trashed with just a few keystrokes, brands must do more to mitigate against fraud.

A company’s reputation means everything and must be protected as if it’s a matter of life and death – from a business perspective, that’s exactly what it is. Machine learning is recognized as crucial to fighting fraud without adding friction and enabling brands to spot issues before they escalate and impact reputation.”

Automation in the form of machine learning is widely seen (66.2%) as the most useful implementation of artificial intelligence for fraud prevention, ahead of LLMs (46%), generative adversarial networks (GANs) (38.7%) and big data analytics (36.8%).

Across the board, two-factor authentication (2FA) – which includes technologies such as 3D Secure and biometric verification – is the most popular fraud-thwarting tool (54.1%).

• Get the full results of the 2024 Fraud and Payments Survey in Ravelin's 52-page report here.
• A more detailed picture of how fraud affects UK businesses in particular can be seen in the UK-specific fraud trends report by Ravelin – download here.
  
• The Germany report is available here (in English) and the France report available here (in French).
  

Methodology

In March 2024, Ravelin carried out an online survey of 1457 fraud and payments professionals from around the world, with a focus on the UK, USA, Canada, France, Germany, Italy, Spain, Australia, Brazil, and Mexico.

Participants belonged to the C-suite or fraud/risk, finance/payments, compliance/operations or product teams of enterprises in the following industries: Retail, Marketplace, Digital Goods, Travel & Hospitality.

Survey participants all worked for businesses with more than $50 million in annual revenue and/or over 500 employees, which sell their products either online or both online and offline. They were asked questions around their observations, attitudes and predictions related to fraud and payments in the past 12 months, at present, as well as in the future.

About Ravelin

Ravelin is a leading AI-native enterprise fraud prevention platform, trusted by global brands to protect against the myriad threats posed by fraudsters. With a proven track record of delivering tangible results and unmatched expertise in fraud detection and prevention, Ravelin is committed to helping businesses thrive in an increasingly complex digital landscape. www.ravelin.com