Global Economic Crime Hits Record Levels
A much wider awareness and understanding of the range, threat and cost of fraud in business has driven reported economic crime to its highest level recorded in PwC’s bi-annual survey of business crime. The survey examines over 7200 respondents from 123 countries.
Overall, 49% of respondents, said their companies had suffered fraud in the last two years, up from 36% in 2016. Asset misappropriation (45%) continues to lead in economic crime experienced by organisations in the last 24 months, cybercrime (31%), consumer fraud (29%) and business misconduct (28%) are close behind.
This year’s survey revealed a significant increase (+6% to 52%) in the share of economic crime committed by internal actors. There was also a jump in the percentage of those crimes attributed to senior management (from 16% in 2016 to 24% in 2018). However there are regional variations. In Australia (64%), the UK (55%), Canada (58%); Argentina (44%) and the US (48%), most reported crime was committed by external actors.
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.
18 countries reported cybercrime to be more disruptive than the global average (15%), including Ireland (39%), Belgium (38%), South Korea (31%), Canada (29%), the UK (25%), and the US (22%) all reporting higher than the global average. Reports of disruption from consumer credit card and financial fraud were higher than the global average (29%) amongst regions including Africa (36%); Eastern Europe (36%); and North America (32%).
Cybercrime is likely to be the most disruptive economic crime in the next two years, with respondents saying it is twice as likely as any other fraud to be identified to potentially impact organisations. It’s also reflected by a rise in the number of people reporting having a cyber prevention and detection plan in place and fully operational (59%, up from 37% in 2016).
Respondents reported that using technologies like artificial intelligence (AI) and advanced analytics as part of their efforts to combat and monitor fraud. The survey shows that companies in emerging markets are currently investing in advanced technologies at a faster rate than their counterparts developed nations: 27% of organisations in developing markets currently use or plan to implement AI to combat fraud, versus 22% in developed markets.