Forty-five per cent of all American organisations suffered from some type of fraud in the past two years, according to a global crime survey. The figure for businesses outside the United States was not much better, with 37 per cent falling victim to fraud.
“Economic crime has become a truly borderless threat,” warns Steven Skalak, a partner at PricewaterhouseCoopers’s Forensic Services practice and lead editor of its 2014 Global Economic Crime Survey. “The risk of bribery and corruption is growing as US organisations increasingly operate in and pursue opportunities in high-risk markets.”
The continued upward trend — more than half of companies hit by fraud or cybercrimes in the past 36 months recorded repeat attacks — can have the same impact on revenues and profits as directly as competition and other market forces, claimed the survey which spoke to 5,128 senior executives and managers across 95 countries.
As organisations rely more on technology, they increasingly do business in a “borderless economy” where they are more susceptible to threats from all sides. “The results are clear,” PcW stresses, “while companies certainly should not lose sight of the internal perpetrator of fraud, they need to remain wary of the external threat.”
The chances of a business suffering at the hands of an external fraudster are also closing the gap on the internal perpetrator. Just six percentage points now separate the criminals, with American firms reporting 44 per cent of attacks originating outside the company, or even outside the country, compared to 50 per cent of frauds by employees or contractors.
Other key findings were:
The detection of fraud and cybercrime is as “disappointing and haphazard” as ever, with external tip-offs and internal whistleblowers remaining an organisation’s best bet of uncovering illegal activity.
Fraud initially detected by suspicious transactions plummeted to just 11 per cent this year, down from 30 per cent. Correspondingly, the number of crimes discovered by accident more than double from 15 per cent three years ago to a record 32 per cent today.
“With more opportunities come more risks,” said Didier Lavion, a PwC principal. “No longer can organisations focus their fraud prevention and detection strategies on only a few types of fraud, a certain profile of fraudster, or certain perceived threats. They must be prepared to cast a wider net.”
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