PwC: Global Economic Crime Rates Remain High as Customer Fraud Continues to Rise

PR83051

LONDON, March 3, 2020 /PRNewswire=KYODO JBN/ --

- 47% of companies report experiencing fraud in the last two years - the second

highest reported level in 20 years

- Customer fraud sees the biggest increase in the last two years, up from 29%

to 35%

- Customers, hackers and vendors/suppliers are responsible for 39% of all

incidents in the last two years

Fraud and economic crime rates remain at record highs, impacting companies in

more ways than ever. PwC's bi-annual survey of business crime reports that

fraud committed by customers tops the list of all crimes experienced (at 35%),

up from 29% in 2018. Businesses report that customer fraud and cybercrime are

the most disruptive of all the crimes.

Although fraud committed by customers is on the rise, it is also one of the

types where dedicated resources, robust processes and technology have proven

most effective for prevention.

Globally, all regions experienced customer fraud in the last two years, with

the Middle East (47% up from 36%) and North America (41% up from 32%) seeing

the biggest increases.

The Global Economic Crime and Fraud Survey examines over 5000 responses from 99

countries. It reports on the overall insights from companies who have

experienced on average six incidents over the last two years. The report

provides insights into the threat, cost of fraud and what companies need to do

to develop stronger proactive responses.

The report highlights the importance of prevention and how investing in the

right skillset and technology can create an advantage.  Nearly half of

organisations responded to crime by implementing and enhancing controls, with

60% saying their organisations were better for it.  

However nearly half of respondents did not conduct an investigation at all.

Barely one third reported the crime to their board, but of the organisations

who did, 53% ended up in a better place.

"Fraud and economic crime is a never- ending battle. Getting to the root of the

problem is key to preventing and dealing with future fraud. Whether it's

through technology, new processes, skills and training, or a combination - the

result is strengthening business as a whole against crime, which is ultimately

good for the consumer too." comments Kristin Rivera, PwC Global Forensics

Leader.

The perpetrators: Who's committing the fraud

Fraud hits companies from all angles - the perpetrator could be internal,

external or in many instances there is collusion.

- In the last two years, 39% of respondents said external perpetrators were the

main source of their economic crime incidents.

- One in five respondents cited vendors/suppliers as the source of their most

disruptive external fraud.

- 13% of respondents who experienced fraud in the last two years reported

losing more than US$50 million.  

- Antitrust, insider trading, tax fraud, money laundering,  and bribery and

corruption are reported as being the top five costliest frauds in terms of

direct losses - sometimes compounded by the significant cost of remediation.

Taking action and being prepared

While technology is just part of the answer in fighting fraud, the report finds

that more than 60% of organisations are beginning to employ advanced

technologies such as artificial intelligence and machine learning to combat

fraud, corruption or other economic crime. However, concerns about deploying

technology are linked to cost, insufficient expertise and limited resources.

28% say it's because they struggle to see its value.

The benefit in using technology to fight fraud is undeniable but organisations

must recognise that using tools or technology alone does not amount to an

anti-fraud programme.

"Collecting the right data is just the first step. How the data is analysed is

where companies will have an advantage when fighting fraud. Companies often

fail to see the value in technology when they don't invest in the right skills

and expertise to manage it" comments Kristin Rivera, PwC Global Forensics

Leader.

Notes:

1. Download the report at www.pwc.com/fraudsurvey.

2. Customer fraud is defined as fraud against a company through illegitimate

use of, or deceptive practices associated with, its products or services by

customers or others (e.g. mortgage fraud, credit card fraud).

3. Cybercrime features in the top three most disruptive crimes experienced in

almost all industries reported in the survey - Financial Services (15%),

Industrial Manufacturing and Automotive (15%), Technology, Media and

Telecommunications (20%), Consumer Markets (16%), Government and public sector

(17%), Health Industries (16%).

4. Globally, all regions report experiencing customer fraud in the last two

years:  Middle East (47%), Africa (42%), Asia Pacific (31%), Europe (33%),

Latin America (33%), North America (41%).

5. PwC highlighted the global issue of upskilling in its 23rd CEO survey and

identified that whilst retraining/upskilling was seen as the best way to close

the skills gap, only 18% of CEOs have made 'significant progress' in

establishing an upskilling programme. In order to take advantage of what

technology can do for your organization, hiring the right people to work

alongside new technologies is important. This is apparent even when hiring

staff to support advanced technologies such as artificial intelligence and

machine learning to uncover fraud.

About PwC

At PwC, our purpose is to build trust in society and solve important problems.  

We're a network of firms in 157 countries with over 276,000 people who are

committed to delivering quality in assurance, advisory and tax services. Find

out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of

which is a separate legal entity. Please see www.pwc.com/structure for further

details.

(C) 2020 PwC. All rights reserved

Contact:

Marian Diyaolu

Mobile: +44-7483407064

Email: marian.diyaolu@pwc.com

Source: PwC