The challenges facing your organization

Globalization has led to interdependency and cascading systemic risks notably generated by the digitalization of financial transactions and by the vulnerabilities in corporate information systems. Therefore, all organizations in the course of daily business face exposure to various types of economic crime.

Fraud takes many different forms (deception, bribery, forgery, extortion, corruption, theft, conspiracy, embezzlement, over-invoicing, accounting manipulation, asset misappropriation, false representation, concealment of material facts, and collusion), and attempts at fraud are projected to increase due to the rise in cybercrime. The systems most threatened are those that contain data directly leading to financial assets that can be stolen, or personal data that can be used to construct an attack on financial assets.

Fraud has the potential to disrupt the activity of any business, be it small or large, notably businesses that fail to have robust fraud control frameworks in place. The cost of fraud can rise rapidly, with a devastating effect on companies in terms of time, money, productivity, reputation and client relationships. While the median loss for all cases is €150,000, with 13% of cases causing an average loss of €1 million or more, the prospects of recovery of the proceeds of fraud are remote, with 65% of companies experiencing losses recovering 25% or less of the stolen funds.

In an interconnected world, these categories of economic crimes pose unique threats to global organizations. In addition to triggering fines and even criminal indictments, fraud attempts can be seen as part of a larger organizational problem, be it a failure of internal controls, processes, or lack of appropriate culture or tone at the top. For this reason, companies can play a substantial role in curbing fraud.