Abrigo, the compliance, credit risk and lending solutions provider, has published a new survey revealing that small business owners (SBOs) are facing serious threats from fraud, with over half (57 per cent) reporting they have experienced some form of attack.
The Abrigo survey takes a look at the financial uncertainty organisations are facing and how fraud is further impacting their ability to do business. According to the findings, there was a 25 per cent increase in the value of money lost to fraud from 2023 to 2024, equating to $12.5billion.
“Small businesses are the backbone of our economy, but they’re now being hit from all sides by rising costs, tighter margins, inflation, and an alarming surge in fraud driven by sophisticated AI tools and other evolving tactics,” said Jay Blandford, chief executive officer at Abrigo.
“Community financial institutions play a critical role in supporting small businesses; they are often the first line of defense against fraud. Abrigo leverages the latest technologies, like AI, so that these institutions have a fighting chance in the battle against fraud.”
Spotlighting AI
Respondents revealed that they had experienced AI-based attacks, along with credit card, wire transfer, peer-to-peer payment, and check fraud, although the vast majority expressed concerns surrounding the development of AI in the fraud landscape. Eighty-five per cent said they are extremely, very, or moderately concerned about the tech’s impact on fraud, with 40 per cent having experienced it personally.
Nonetheless, despite rising concerns towards AI’s use by fraudsters, almost seven in 10 (69 per cent) of SBOs were optimistic about AI’s usage in the fight against fraud. Though it can be used as a force for bad, SBOs feel as if their best chance in fighting fraud lies with AI too. Supporting this, 50 per cent said they already use AI-powered fraud detection tools.
Other findings from the Abrigo survey include:
- Eighty-five per cent of SBOs report satisfaction with their bank or credit union’s response to fraud.
- Seventy-four per cent are more likely to reduce their banking engagement, such as credit card use or bank use, if defrauded.
- Only 16 per cent of SBOs feel extremely prepared against fraud.
- Check fraud is also a challenge, with 37 per cent of SBOs having had checks stolen from mailboxes.
- SBOs reported a higher ability to fully recover from fraud (83 per cent) compared to non-owners (74 per cent).
- SBOs reported that they use multi-factor authentication (44 per cent), along with transaction notifications (39 per cent) and fraud alert services from credit bureaus (39 per cent) to stay ahead of emerging threats.
