Cybercrime will become the most disruptive fraud in the next two years, according to the Global Economic Crime and Fraud survey from PwC.
The bi-annual survey of 7,200 respondents from 123 countries found that 49% have suffered fraud in their companies in the last two years, up from 36% in 2016. The most common economic crimes were asset misappropriation (45%), cybercrime (31%), consumer fraud (29%) and business misconduct (28%). PwC has attributed the increase in reporting to greater awareness and understanding.
PwC global forensics leader Kristin Rivera said: “There is far more understanding of what fraud is and where it is taking place, particularly true of cybercrime [regarding] issues, investigations, analysis, and greater investment in controls and prevention.”
Indeed, 59% reported having an operational cyber detection plan, up from 37% in 2016. Additionally, many respondents addressed fraud prevention through corporate culture initiatives and technology. Yet despite the progress, the top impacts to an organisation affect employee morale, business relations, damage to reputation and brand strength. Of respondents, 64% found their financial losses could reach $1m, in addition to the 41% found to be spending double what has been lost to cybercrime on investigations.
The survey found 52% of crime was committed internally, particularly from senior management (24%, up from 16% in 2016). However, crime was committed externally more often in Australia (64%), the UK (55%), Canada (58%), Argentina (44%) and the USA (48%), and commonly perpetrated by agents, shared service providers, vendors and customers. In comparison, the highest levels of economic crime were in Africa (62% up from 57%), North America (54% up from 37%) and Latin America (53% up from 28%).
“While technology has a strong role to play in monitoring and detection, when it comes to blocking that ‘last mile’ to fraud, the returns from people initiatives are likely to far exceed those from investing in another piece of technology,” Rivera added.