PwC’s bi-annual Global Economic Crime and Fraud Survey examined over 7200 respondents from 123 countries. It found a much wider awareness and understanding of the range, threat and cost of fraud in business has driven reported economic crime to its highest level recorded and that rate has increased across all territories:
Source & Copyright©2018 - PricewaterhouseCoopers LLP
Also economic fraud is on the rise with 49% of respondents, reporting that their companies had suffered fraud in the last two years, up from 36% in 2016.
Other findings were that:
- asset misappropriation (45%) continues to lead, cybercrime (31%), consumer fraud (29%) and business misconduct (28%) are close behind
- a jump in the percentage of those crimes attributed to senior management (from 16% in 2016 to 24% in 2018). However there are regional variations.
- 52% of economic crime was committed by internal actors. However there are regional variations: Australia (64%), the UK (55%), Canada (58%); Argentina (44%) and the US (48%), most reported crime was committed by external actors
- 68% of external perpetrators (responsible for 40% of fraud) are “frenemies” of the organisation – people the organisation works with, including agents, shared service providers, vendors and customers.
Cost of fraud and prevention
As awareness, and the profile of fraud and economic crime has risen, so too have investments to combat it, linked also to the direct financial losses reported in the past two years. In the coming two years, 51% will maintain investment levels, and 44% will increase them. Another important finding was that:Other findings:
- 17% of respondents said they had spent the same amount again as they had lost on investigations and/or interventions of their most disruptive fraud
- 41% said they spent at least twice as much as they lost to cybercrime on investigations and other interventions.
With the public’s tolerance for corporate and personal misbehaviour declining, the survey found that in addition to beefing up their internal controls respondents were:
- addressing fraud prevention through corporate culture initiatives (via internal or external tip offs or hotlines) through which 27% of frauds were detected.
- using technologies like artificial intelligence (AI) and advanced analytics as part of their efforts to combat and monitor fraud
- reporting that blind spots still prevail. 46% of respondents globally said their organisation have still not conducted any kind of risk assessment for fraud or economic crime.
- Reporting that they have a formal business ethics and compliance programme has dropped from 82% to 77%.
CTMfile take: Sadly this survey shows, yet again, that your biggest danger are from your internal staff and your frenemies.
Fraud prevention: latest research and tips
Telltale signs; contactless fraud; eyetracking technology; money laundering; cutting off terrorist funding; cost of fraud prevention
Fraud’s underground marketplace is targeting your organisation
Symantec Internet Security Threat Report shows fraud is a business and details the best practices to prevent each type of Internet threat
Fraud prevention report: use holistic approach & machine learning + beware DarkNet
Fraud prevention is a combination of processes and systems. Each company has to develop their own strategy for minimising fraud