Your business is under attack. A hidden hazard is chipping away at your bottom line, cutting into already razor-thin margins and making it harder for you and your business to succeed. The problem is fraud — and physical operations leaders are starting to take notice.
Motive recently surveyed 1,000 leaders across trucking and logistics, construction, oil and gas, and other industries to gain deeper insights into the challenges physical operations leaders faced over the past year, as well as the opportunities that lie ahead. Their responses were compiled in the inaugural Physical Economy Outlook report and the results were eye-opening.
Key takeaways:
- Leaders estimate that 19%-22% of their fleet spend is being lost to theft and fraud — things like fuel fraud or purchases outside of approved categories.
- 44% of leaders know fraud is impacting their business, but they’re not sure how to find it.
- AI is critical to identifying and preventing fraud that often hides and thrives in large transaction volumes.
Fraud’s impact on your fleet
We asked leaders to list the biggest challenges they faced in the past 12 months, with 27% of survey respondents citing theft or fraud, which includes anything from credit card and fuel fraud to stolen equipment, property and shipments.
When asked to quantify the impact fraud is having, leaders estimate that 19% of their current fleet spend is lost to fraud or theft. It’s even higher for industries like construction, where leaders estimate that 22% of their fleet spend is lost to fraud. That can add up to more than half a million dollars* lost for a several hundred-vehicle fleet.
Even more troubling, 42% of leaders acknowledge fraud's significant impact on their operations but admit they’re unsure where to find it. And 44% of C-suite executives expect fraud to be one of the biggest threats to their business over the coming 12 months.
So what can you do to detect fraud and mitigate its impact?
How to spot and reduce fleet fraud
Fraud is insidious. It hides in the shadows and is nearly impossible to uncover with the human eye. Without technology like artificial intelligence (AI), which can analyze large amounts of data and detect suspicious activity at scale, seeking out fraud is a time-consuming manual process. Changes to your current processes and help from technology can give you an edge when fighting fraud. Here are six ways you can get a leg up on your fight against fraud.
1. Bring fleet and spend management together into a single platform powered by artificial intelligence.
AI shines when given a lot of data from disparate sources. And physical economy leaders are ready to make a bet on AI, with 76% saying they want to use AI to gain critical visibility across their operations.
By combining fleet and spend management in an AI-powered integrated operations platform, businesses can save time, automatically surface valuable insights and spot fraud faster.
2. Utilize advanced spend controls to proactively reduce misuse.
Fleets often set up fleet card spend controls as a fraud prevention tactic, however, data from a recent Motive and Freightwaves survey found one-third of respondents still find implementing spend controls to be complicated and time-consuming.
To rectify this, operators should partner with a fleet card provider, like Motive, that allows for easy-to-use, granular spend control capabilities that can be changed instantly when conditions change. Establish rules for individual drivers or driver sets regarding a merchant, time of day and location to block unauthorized spending before it happens.
3. Look beyond chip and pin to gain enhanced card security.
Requiring drivers to enter a PIN code before using a company card is great but it’s far from perfect. PINs are vulnerable to capture by cameras and skimming devices. Instead, consider phone-based unlocking, which requires users to unlock a card with their own device. Motive Card features phone-based unlock functionality to further safeguard against fraudulent spend.
Additionally, this functionality deters out-of-policy spend and offers better control during point-of-sale transactions as cardholders are only unlocking the card when they are spending.
4. Automate fraud detection and resolution.
In the fight against fraud, speed matters. The longer fraud goes undetected, the more damage it can do. This is where AI can make a massive impact. Relying on manual audits of suspicious transaction activity can leave organizations vulnerable to threats weeks or months after they have already suffered losses.
A key advantage of Motive is its unique integration of vehicle telematics, fleet management and spending data to detect fraud. For instance, Motive’s fraud detection capability uses Vehicle Gateway GPS data and Motive Card fuel spend data to match vehicle and purchase locations. Any inconsistencies trigger a fraud alert, allowing fleet managers to address potential losses promptly.
5. Consolidate spend to reduce risk.
Managing multiple cards and spend platforms can be time-consuming or complicated. Not only that, incorporating multiple payment products across multiple platforms can increase a company’s exposure to fraud.
By choosing a fleet card that can be used for all expenses, and that integrates fleet and spend management solutions, you can reduce risk and uplevel fraud management performance while reducing overhead and time spent.
Ready to up your fraud-fighting game? Motive is here to help. Learn how the Motive can spot and reduce fraud and theft, increase profitability and provide greater visibility into operations.
*The Department of Energy estimates that an average delivery truck uses 1,899 gallons of fuel annually. Diesel costs fluctuate daily, but let’s assume that a gallon of diesel costs $3.80. If you have a 500-vehicle fleet, you’re using, on average, 949,500 gallons of fuel each year at a cost of $3,608,100 (500 x 1,899 x 3.80 = 3,608,100). That means you could be losing $685,539 (19% of $3,608,100) due to fraud and theft.