Findings by PwC highlight a growing problem for both private and public organisations. Cybercrime is becoming one of the most damaging types of fraud.
There is a spike in the number of financial crimes, according to the study. This happened due to the increased awareness and understanding of the scope, severity and cost of fraud against businesses.
The Global Financial Crime and Fraud Survey had 7,200 participants from 123 different countries. According to our research, 49% of all companies have been victims of electronic fraud in the last two years. This is up from the 36% of 2016. The largest percentage of financial crimes reported, categorized geographically. Africa (62% from 57%), North America (54% from 37%) and Latin America (53% from 28%).
The most common crime faced by organisations in the last two years is asset misappropriation at 45%. Cybercrime is a fairly common problem with 31% of people surveyed being impacted. It is followed by consumer misrepresentation at 29% and professional misconduct at 28%.
The highest levels of fraud are in Insurance (62%), Agriculture (59%), Communications (including telecommunications) (59%), Financial Services (58%), Retail and Consumer Goods (56%) and Real Estate (56%).
The study revealed that over two-thirds of cybercrime is carried out through phishing and malware.
According to Kristin Rivera, Head of Crime Advisory Services for PwC’s global network, “Reporting higher crime rates does not necessarily mean an increase in crime. What the research shows us is that there is a much better understanding of what fraud is and where it takes place. This is particularly true of cybercrime, where there is now a greater understanding, more research, analysis and greater investment in detection and prevention measures”.
Didier Lavion, Principal in PwC US’ Forensic Advisory Services practice, commented: “Perpetrators now have strategic objectives and are using more sophisticated methods,” Didier Lavion continued. “Fraud is a large area of activity in its own right. It relies on technology, innovation, is opportunistic and affects the entire operation of organisations – like the biggest competitor you didn’t know you had.”
17% of respondents said that the money they spent on investigating serious incidents and corrective actions was the same as what they lost from those incidents. 41% said they spent at least twice as much on investigations and corrective actions.
Survey participants say that AI can be used in their work to address and monitor financial crime. The insights it provides are also very valuable to their process. In developing countries, an increased number of organizations are using AI to combat fraud compared to those in developed markets.
46% of global respondents said their companies have not so far carried out a fraud or financial crime risk assessment. In addition, the percentage of respondents who say they have a formal professional ethics and compliance policy has shrunk from 82% to 77%.
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Author: PC-GR
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