Decrease Fraud to Increase Revenue, Profit, and ROI

Stepping up sales, marketing, and output is one way to increase revenue and profit, but in a guest post on, Dan Draz explains why targeting fraud can be just as effective:

Industry studies suggest that businesses lose an average of 5% of their revenue annually to fraud. Take a $500,000,000 company, losing 5% off the bottom line means a net loss of $25,000,000 and that’s a substantial line item loss for most companies. While many companies factor fraud losses (5%) into the “cost of doing business,” the problem is that when unchecked, the amount of fraud increases dramatically. The larger amount of fraud then corresponds to a dramatic increase in lost revenue, decreased ROI, and this quickly becomes unmanageable. So, instead of a 5% loss with a $25,000,000 net impact the fraud numbers quickly escalate to 10% of revenue with a $50,000,000 net impact.

No matter how you paint it, those kinds of financial figures represent substantial revenue loss, decreased ROI and significant impact to the bottom line. Not many companies are easily able to just chalk those kinds of losses up to “the cost of doing business!”

Fraud Impact – The Financial Services Insustry

For the 64,000 foot view, think a bit more globally about how these fraud loss numbers represent an industry. Let’s take the financial services industry as an example. According to one analyst firm’s study, the financial services industry is estimated to be losing between 12-15 billion dollars a year due to fraud.

Using the 80-20 historical fraud loss calculation estimate, with 20% being the known fraud and 80% representing the unknown and unreported fraud, the financial services industry is, in all likelihood, losing significantly more than the estimated 12-15 billion dollars a year which is currently being reported.

Decrease Fraud – Increase Revenue, Profit and ROI

If companies reduce their fraud exposure by 5-10%, there is simultaneous financial impact: an ROI increase and revenue returned to the bottom line. So, the questions we’re often asked involve the actionable steps companies can take to start the process and accomplish the desired financial results.

Visit for the full post explaining how to decrease fraud for an increase in revenue, profit, and ROI.