Wednesday 7th March, 2018
According to PwC’s bi-annual survey of business crime the threat and cost of fraud in business has driven economic crime to its highest level recorded.
The Global Economic Crime and Fraud Survey examined over 7200 respondents from 123 countries. It found the top three types of crime reported were asset misappropriation (45%), cybercrime (31%) and consumer fraud (29%).
Overall, 49% of respondents, said their companies had suffered fraud in the last two years, up from 36% in 2016.
There was also a jump in the percentage of those crimes attributed to senior management (from 16% in 2016 to 24% in 2018). In the UK (55%) and the US (48%), 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.
“The results underline the greater awareness and understanding of the types of fraud, perpetrators, the role of technology, and fraud’s potential impacts and costs for a business,” comments Kristin Rivera, PwC Global Forensics Leader:
“It’s particularly relevant when you consider a sizable percentage of the ‘external’ perpetrators is made up of third-parties with whom companies have regular relationships: agents, vendors, shared service providers, customers and more. Everyone in the business must be vigilant about who it allows in to access its systems and processes.”
With the public’s tolerance for corporate and personal misbehaviour declining, in addition to beefing up their internal controls, many respondents reported addressing fraud prevention through corporate culture initiatives (via internal or external tip offs or hotlines) through which 27% of frauds were detected.
Respondents also reported using technologies like artificial intelligence (AI) and advanced analytics as part of their efforts to combat and monitor fraud.