Economic crime remains a fundamental fact of life for every segment of the global business community — and is a persistent threat to business and business processes.
Fraud comes in many varieties, each with its own characteristics, threats and strategic consequences.
While it may ebb and flow in virulence and variety, our 14 years of survey data shows that at any given time period, nearly one in three of those surveyed report suffering a significant economic crime event.
This year, 37% of respondents reported economic crime, an increase of 3 percentage points from our 2011 survey.
Cybercrime reports continue to increase in volume, frequency and sophistication. It is the fourth-most reported type of crime in this year’s survey. And fundamentally, cybercrime is not just a technology problem — it is a business strategy problem.
There was a relative increase of 13% in reported incidences of bribery and corruption since our last survey. Underscoring the significance of this, our 17th Annual Global CEO Survey reveals that more than half of CEOs are concerned about bribery and corruption.
Economic crimes of a “systemic” nature — such as bribery and corruption, money laundering and anticompetitive practices — are more regularly examined by regulators and represent a greater risk than “episodic” frauds.
The most damaging forms of economic crime exploit the tension between two equally fundamental business goals — profit and compliance.
Organisations with operations in high-risk markets were twice as likely to report being asked to pay a bribe.
Procurement fraud, reported by 29% of respondents having experienced an economic crime, is a growing threat.
The effectiveness of internal controls in detecting economic crime continue to improve. Respondents to this year’s survey report 55% of instances were uncovered by internal controls, be they preventative or detective — up from 50% in 2011.
Economic crime patterns follow certain megatrends — such as the movement of wealth from the West to the South and East, and the increasing use of technology platforms for all types of business processes.