Fraud in GCC 6pc above global average
Manama : Bahraini companies and residents need to tighten their security against fraud as a study has revealed that fraud increased in the GCC more than any other region.
Incidence of fraud in the GCC region is six per cent above the global average according to 2016-17 Kroll Annual Global Fraud and Risk Report. Eighty-eight per cent executives in the GCC surveyed for the report said they have experienced at least one fraud incident in the past year. 90 per cent reported at least one cyber incident while 82 per cent reported security incidents.
According to the report, current and former employees were most likely the perpetrators. “Despite widespread concerns about external attacks, the findings reveal that the most common perpetrators of fraud, cyber and security incidents over the past 12 months were current and former employees,” the report revealed.
Internal financial fraud was named as the most common type of fraud experienced by respondents in the Middle East. This was followed by the theft of both physical and information assets, the incidence of which were approximately in line with the global averages of 29 per cent and 24 per cent, respectively. Senior or middle management were named as the most common perpetrators of fraud in the region, cited by 36 per cent of respondents in the Middle East, followed by junior employees, cited by 34 per cent. Third party entities were also considered to have significant roles in most fraud incidents, with joint venture partners, vendors, suppliers, and agents named by around a quarter of participants
The number of fraud incidents have increased on a global level as well, the report said.
“Fraud, cyber, and security incidents are now the “new normal” for companies across the world, according to the executives surveyed. The proportion of executives that reported their companies fell victim to fraud in the past year rose significantly to 82 per cent, from 75 per cent in 2015 and 70 per cent in 2013, highlighting the escalating threat to corporate reputation and regulatory compliance.” the report said.
“One thing that has become even more pronounced is the importance of anticipating and addressing the insider threats. The results of our survey underscore and highlight this conclusion. Whether it’s fraud, cyber threats, or security risk, whether it’s Asia, Europe, or the Americas or whether it’s services, finance, retail, or manufacturing, the figures show companies are most at risk from an employee, a former employee, or a temporary employee/contractor” said Tommy Helsby Co-Chairman, Investigations and Disputes, Kroll
“There is good and bad news in this conclusion. The good news is that companies have a better chance of managing their risk exposure to insiders than an anonymous outsider, once the threat is recognized and understood. They also have a better chance of successfully investigating the problem and securing recoveries, having greater access to and control of the evidence trail inside the company. The bad news is that the impact on reputation, both inside and outside the company, may be greater if an insider threat or incident is not handled carefully — indeed, our survey shows that one of the most serious consequences of fraud and risk issues is the impact on employee morale. In a regulated business, the relevant regulators will also almost certainly take an interest: Poor controls in one area may be viewed as a trigger for closer scrutiny, even when the problem has no relevance to safety or customer data or funds” he said.
Related Posts