Fraud Uncertainty Climbs to 28%, Disrupting Operations for Mid-Market Firms

There is a growing concern for middle-market firms in the United States, and it surrounds fraud and risk management.

The PYMNTS Intelligence report “Fraud Risk Management Pushes Innovation Delays as Uncertainty Rises” highlighted how increasing fraud-related uncertainty is forcing companies to divert resources and postpone growth initiatives. Heads of payments at middle-market firms, those with annual revenues ranging from $100 million to $1 billion, reported that the need to manage escalating fraud risks is disrupting their businesses. This shift in focus underscores the operational influence that fraud concerns now exert, extending beyond direct fraud prevention measures.

The report, based on a survey conducted from Sept. 5 to Sept. 17, 2024, with 60 heads of payment, indicated a divergence between general business uncertainty and specific anxieties about fraud. While 22% of respondents reported high overall uncertainty in September, a decrease from 30% in March, the percentage citing uncertainty in fraud and risk management impacting their operations surged to 28% in September, up from 17% in March.

This heightened concern is not merely abstract; many of these companies are experiencing tangible consequences and are compelled to delay or cancel innovation projects and reallocate resources to combat the growing threat of fraud. This dynamic suggests that despite positive macroeconomic trends, the specter of fraud is becoming a dominant factor in shaping strategic decisions within the middle market.

Here are three key data points from the report.

• Overall Uncertainty Decline: Only 22% of heads of payment reported high uncertainty in September, a decrease from 30% in March, but before the tariff- and trade-related uncertainty of the first quarter of 2025.
• Rising Fraud Uncertainty: The report found that 28% of heads of payment indicated that fraud and risk management uncertainties impacted their operations in September, an increase from 17% in March.
• Innovation Delays: Approximately 66% of heads of payment in high-uncertainty environments reported frequently delaying or canceling innovation and technology initiatives due to fraud risks.

Beyond these core findings, the report also revealed a softening optimism regarding future uncertainty. While 57% of heads of payments anticipated an improvement in their operational uncertainty over the next year in September, the figure represented a decline from 67% in June.

Those already experiencing high levels of uncertainty were less hopeful, with 15% expecting improvement in contrast to the 56% who felt this way in March. This lack of confidence among firms facing high uncertainty could lead to more cautious decision making, further hindering innovation and long-term planning.

In response to these escalating fraud concerns, over half of the surveyed middle-market firms said they increased their reliance on technology in the prior 30 days, with artificial intelligence investments seeing a rise from 6.7% in June to 22% in September.

A growing number of companies are incorporating new processes and workflows to bolster their long-term resilience against fraud. These strategic adjustments underscore the impact that fraud-related uncertainty is having on the operational priorities of middle-market firms.

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