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More UK companies are falling victim to fraud in the past two years than nearly anywhere else in the world.
The latest PwC Global Economic Crime Survey found that nearly two in three UK companies (64 per cent) said they have experienced fraud or economic crime in the last two years – above the global average for this year (46 per cent), as well as being higher than the last time the survey was conducted in 2020 (56 per cent).
Cyber crime was the most frequently reported fraud with almost a third (32 per cent) experiencing a cyber breach, although this is less than the number of those who fell victim to cyber crime in the 2020 survey (42 per cent). Supply chain fraud, included for the first time in the survey accounted for almost a fifth of respondents (19 per cent).
Fran Marwood, partner and head of digital & forensic investigations, said with increased levels of disruption being experienced, and the fact that more UK organisations have experienced fraud than in its last survey, it’s surprising to see a decline in some types of fraud and economic crime, such as cyber crime, bribery and financial statement fraud.
“From what we are seeing in the market, I believe some of the trends are temporary, with, for example, instances of fraud and misconduct potentially remaining undiscovered as traditional controls and corporate culture evolve to keep pace with remote working,” she said.
“Encouragingly, in some cases, incidences of economic crimes have reduced due to the investment organisations have made in effective compliance programmes, cyber defences and fraud prevention controls.”
Just over half of UK respondents (51 per cent) said fraud was committed by external fraudsters, compared to 43 per cent globally. The top three external perpetrators according to those asked in the UK were customers, hackers and vendors/suppliers.
Further findings revealed that the most serious fraud was initially detected most frequently by companies monitoring suspicious activity using forensic technology (15 per cent of cases) and by internal audit according to 15 per cent of respondents, followed by corporate security (12 per cent) and whistleblowing or tip-off (10 per cent). In terms of money lost through fraud, almost a quarter of respondents reported the figure to be between US$1 million and US$5 million.
“The message to organisations is clear. With fraud now a greater and more costly threat than we’ve seen before, and the risk landscape continuing to undergo rapid change, it is important that organisations invest in prevention, and take the time to make sure their defences are match-fit for any attacks. Organisations also need measures in place so they can act at pace when fraud happens to them. Failing to do so can end up with them suffering the penalty,” Ms Marwood said.