The latest data from LexisNexis showed that fraud costs and attack volumes are significantly higher than they were before the pandemic. At the beginning of 2020, pre-Covid, the cost was $3.16 ($3.56 for lenders).
While US financial services firms have seen costs rise – $4 for firms like wealth managers and $4.16 for lenders – the increase before the pandemic is less than 10% while in Canada it is more than 15%.
The average number of successful fraud attacks on Canadian financial services firms stood at 622 in 2021, up from 365 in 2019. Those that were prevented, the total number of attacks in the same period more than doubled.
Mortgage lenders have seen a sharp rise in fraud costs during the pandemic and with greater use of online/mobile channels, the financial services sector has seen higher costs here as well.
Among the biggest challenges is identity fraud with identity verification, accounting for a significant portion of the loss at the money distribution stage.