Mobile Fraud Expected to Explode by 2017
E-Commerce: Mobile vs. Internet
33% of organizations surveyed said they generate revenues from the Internet of about 26%-50%, and 25% indicate that 11%-25% of that revenue arrived through a mobile app.
Mobile E-Commerce Revenue Growth
50% of organizations surveyed said mobile revenues will grow 11%-50% over the next three years. 30% believe it will grow 51%-100%.
Darkside to Mobile Revenues
Companies reported the following mobile revenue losses due to fraud last year: No losses: 8%, 34% lost 5%, 14% lost 10%, 15% lost 25%
Protecting Against Fraud
66% of respondents said they can quickly detect and remediate Internet and mobile fraud on their sites. Despite their confidence, many fraud incidents cause significant revenue losses and the report concluded that they lack adequate security.
Growth in Mobile Fraud Expected
19% of companies said 20%-49% of their fraud incidents are due to mobile devices. Rates are expected to double over the next 2 to 3 years unless companies quickly implement significant remedial actions.
Percentage of Mobile Fraud
48% of respondents said they experienced between one and 24 fraud incidents last year. 25% said they experienced between 25 and 250 incidents. The small number of incidents reported either shows that organizations have a small scale presence on the Web, or probably are “oblivious” to what’s happening.
Average Mobile Losses
The average mobile loss was $92.3 million last year. On average, respondents said losses due to mobile fraud were 3% of total revenues annually.
Mobile Transactions’ Growth Underestimated
Respondents expect an average of 47% growth of transactions on mobile during the next five years, which the survey authors said is too conservative. Assuming today’s loss ratios persist, mobile losses will increase by at least 47%.
Recommendations
Companies should invest in an amount equal to 10%-20% of their annual losses due to fraud to boost their ability to limit or eliminate such losses.
