What is the cost of identity theft to businesses?

Identity theft has become a threat from which companies are not safe. Due to mass digitization. The risks associated with the loss of confidential data and the vulnerability of business information have led to an alarming increase in cases of identity theft. But what is the true cost of identity theft to businesses?

In this blog, we’ll tell you how much phishing could be affecting your business and what the losses could be. Addressing not only the financial effects, but also reputational, customer trust, and business stability.

In addition, we will explain why phishing protection should not be seen simply as an additional security measure. It should be seen as a crucial investment to ensure the long-term success of any business.

 

Statistics: Cost of identity theft

 

According to IBM’s latest cybersecurity statistics the average cost of a data breach due to impersonation increases significantly. Companies lost around 2.79 million dollars a year due to false identities.

We can look at the picture from two perspectives, with statistics relating to the situation of US organizations. They state that in 2023, more than 2,100 filed data breach notifications. An increase compared to the previous year, when 1,802 breaches were recorded.

Debt.com’s survey results indicate that identity theft was more common in 2023, with 49.22% of respondents saying they had been victims, an increase of almost 10% from 2021.
And in Latin America, the situation is no different, as confirmed by Asobancaria. The association recorded 30,410 cases of cybercrime in 2020 alone. 42%of the complaints from entities refer to phishing. 28% to identity theft and 16% to fraud in online media.

Moreover, beyond the monetary losses. This type of fraud had an impact on customer confidence. Since most companies report a significant decrease in customer loyalty after having been victims of identity theft.

However, one of the most significant impacts is the recovery of the business reputation. This can take time or even never fully recover.

These figures highlight the importance of addressing phishing as a problem, not just a cybersecurity issue.

But also as a comprehensive problem that threatens the financial stability and long-term sustainability of businesses.

 

Impacts and costs of identity theft

Financial losses and economic hardship
Fraudulent transactions and financial fraud can cause significant financial losses for companies. This affects their financial health and their ability to invest in growth.

Legal effects
Companies can be exposed to fines and legal action if they fail to protect the data of their customers and users. This not only damages reputation but also causes significant legal costs.

Damage to business reputation and loss of trust
Identity fraud damages a company’s reputation and the trust of customers and partners. Loss of trust can lead to business losses and the flight of customers to more trustworthy competitors.

Underinvestment in enterprise security

Investing in security technologies is not only a necessary precaution, it is a wise investment! Conscientious businesses are discovering that this investment not only saves money in the long run. It also prevents ongoing financial difficulties associated with identity fraud.

How to prevent the high cost of impersonation in business?

The adoption of advanced identity verification technologies emerges as an effective shield to protect the integrity of enterprises.

The implementation of biometric systems, passwordless user authentication, and any real-time identity verification technology. All become essential pillars in the defense against fraud.

These technologies make the user experience more efficient and secure. Real-time verification constantly assesses the authenticity of interactions. This makes it possible to quickly detect and respond to potential spoofing attempts.

In short, investing in identity verification technologies improves business security and increases customer confidence by ensuring the protection of sensitive data in an ever-changing digital world.

 

Prevent identity theft with Verifik

Verifik.co offers complete protection for businesses in the digital world. Our comprehensive identity verification toolkit has helped hundreds of companies in the verification, authentication and effective management of their customers and users.

Verifik.co Key Tools

Data Validation: Our data validation API checks more than 75 sources of information globally, providing key information for secure and well-informed decisions about people, companies and vehicles.

Know more about Data Validation
OTP Login: Forget conventional passwords and find security with OTP codes for fast and secure keyless login.

Know more about OTP Login
Facial Recognition: Facial biometric identity confirmation ensures that the person you say you are, is exactly who you say you are.

Know more about Facial Recognition and Liveness Check
Document Scanning – OCR : Automating the extraction of crucial data from documents, this tool eliminates manual processes, improving accuracy and operational efficiency.

Know more about Scan Documents
Not yet part of the companies that detect and prevent identity theft? Find out more about Verifik.co here or schedule a free demo to explore the perfect solution for your company. Creating secure digital ecosystems is possible with Verifik.co!