Firms fail to leverage tech to combat fraud

Manama: Technology was found to be a significant enabler for a quarter (24 per cent) of the 750 fraudsters investigated by forensic specialists across 78 countries, according to a new report by KPMG International.

By contrast, the Global Profiles of the Fraudster report reveals that proactive analytics play an astonishingly minor role in combating fraud, with only 3pc of the fraudsters being detected in this manner.

“As technology becomes more advanced, so do the schemes to use it maliciously,” said Phil Ostwalt, Global Head of Investigations, KPMG International. “And while it’s clear that fraudsters are all too comfortable making use of technology to perpetrate a fraud, we are seeing little evidence that companies are doing the same to prevent it.”

In Bahrain, government and private organisations are taking some steps to protect firms against fraud. However, as indicated, these steps may not be enough. 

Jeyapriya Partiban, Partner and Head of Risk Consulting at KPMG in Bahrain, stated that fraud and economic crimes are critical systemic risks that any business needs to be aware of.

“With technological disruption, these risks have compounded. However, organisations are increasingly becoming aware of the threats they face, and are working proactively to prevent any fraud-related incidents,” Jeyapriya added.

Tech-savvy fraudsters are using technology in a variety of ways to perpetrate frauds. In these instances, about 24pc entailed the creation of false information in accounting records, 20pc involved fraudsters providing false information via email and 13pc involved perpetrators abusing permissible access to computer systems.

Weak internal controls were a factor for 61pc of fraudsters and the problem appears to be growing. The number of fraudsters who were able to commit their acts as a result of taking advantage of weak controls rose to 27pc, from 18pc in the 2013 report.