Double-digit rise in crime against UK corporates as cyber becomes the fastest growing economic crime
24 months, outstripping global rates
The rise of cybercrime is in stark contrast with some of the traditional forms of economic crime, including bribery, asset misappropriation and procurement fraud, which have declined.
Just over half (51%), of UK organisations say they expect to be the victim of cybercrime in the next two years, suggesting it will become the UK’s largest economic crime. However, only 12% of respondents believe that law enforcement authorities have the necessary skills and resources to investigate it. Almost a third of UK entities have no cyber response plan in place.
The ‘silver fraudster’
This year’s survey heralds the rise of the so-called ‘silver fraudster’ in the UK with a strong shift towards more senior and experienced employees carrying out corporate fraud. Senior management fraud is often more difficult to detect and prevent, and usually has a much greater impact on an organisation. This change is therefore a particular concern for UK entities.
While those in middle management remained the most responsible for economic crime (36%), half the instances committed by staff involved employees over the age of 40, and the number carried out by staff over the age of 50 tripled from 6% to 18%.
The Economic Crime Survey found that 45% of internal fraudsters had worked for more than five years within the organisation they defrauded and 21% had more than a decade of service. In contrast, the number of junior staff carrying out economic crime has fallen since 2014 from 45% to 28%.
Compliance and Culture
While the vast majority (86%) of UK organisations have formal business ethics and compliance programmes in place, far fewer (63%) back up these rules with regular training and communication. Moreover, frauds that staff typically commit, such as accounting and HR fraud, have risen in number in the last two years.
Financial services companies are set to be the biggest spenders on compliance in the UK in the next two years while compliance budgets for other industries are under pressure as they face demands to do more with less, according to survey responses.
“Economic crime is a question of culture, not just compliance. Even the best compliance programmes will fail if a company’s culture accepts wrong-doing as a norm.
- 20% of UK organisation say they have never performed a fraud risk assessment while 44% do so annually.
- 5% of respondents say they have been asked to pay a bribe in the past 24 months while 7% feel they lost a business opportunity to a competitor who was willing to pay it.
- 22% of frauds were detected through suspicious transaction monitoring, fraud risk management (14%); data analytics (8%); internal audit (8%) and accidental discovery (8%).