Pulling fraud out of the shadows:

A spotlight on the Middle East

PwC's Global Economic Crime and Fraud Survey 2018

Fraud, the biggest competitor you didn’t know you had

PwC’s Middle East Economic Crime and Fraud Survey 2018 confirms that economic crime is maintaining its trajectory in the region and continuing to disrupt businesses.

Current results follow established historical trends, with the proportion of organisations reporting that they’ve fallen victim to acts of fraud and economic crime increasing to 34%, up from 26% in 2016. While this rise could be attributable to an increase in awareness of economic crime and an improvement in detection mechanisms within organisations, what we should really be asking is: “What about the other 66% of organisations lurking in the shadows?”

This question is essentially about the amount of fraud that’s still going unseen or unreported. And it’s given greater urgency by the fact that two new categories of fraud that were only introduced into the survey this year – business misconduct and fraud committed by consumers – emerged as the most reported crimes experienced by organisations across the region.

Each of us has personal experience of the ever-expanding part played by technology in all aspects of our lives, and of its evolving role in fraud prevention and cyber intrusion in the work environment. The stakes are increasing in tandem as technology affords perpetrators the ease and convenience of being able to cause disruption from the comfort of their living-rooms. However, the impact of technology also works the other way, with companies moving to take control and leverage technology to help fight and prevent crime in the workplace.

Alongside the growing role of technology, the survey results strongly underline the importance of people, confirming that people can be both your greatest ally and your strongest foe in the fight against fraud. By investing in your people it will not only help prevent crime – but will also motivate and push economic growth in your workplace forward.

In addition to highlighting and analysing the visible frauds that organisations are facing, this report also outlines steps to knowing your business better, illuminating the blind spots of economic crime lurking in the shadows. By doing this, we hope our study will enable you to see the bigger picture – and equip yourself and your business to actively tackle fraud risks head on, emerging stronger as a result.

We would like to extend our thanks to all of the organisations and respondents who made the 2018 Middle East Global Economic Crime and Fraud Survey possible.

Nick Robinson
Nick Robinson

Middle East Forensics Leader

Tareq Haddad
Tareq Haddad

Middle East Investigations Leader

Key findings

1. Economic crime is being pulled out of the shadows

2. Technology is proving to be a strong ally

3. People are key

4. The traction of detection of fraud and economic crime is growing

1. Economic crime is being pulled out of the shadows

More organisations reported experiencing fraud in the Middle East in the past 24 months. The proportion increased to

34% from

26%

Economic threats are evolving. Two new categories of fraud introduced to the study this year – namely

Business misconduct and Fraud committed by the consumer

have emerged as the economic crimes most often reported, alongside asset misappropriation.

The most disruptive economic crime experienced by organisations has cost

46% of respondents between

US$100,000 -
US$50 million

Is this consistent with the fraud trends you are seeing in your organisation – and how can you take action in response?

Hacker

2. Technology is proving to be a strong ally

Reliance on technology is on the rise, with

52%

of organisations using technology as the primary monitoring technique for fraud and economic crime in relation to cyber-attacks and vulnerabilities.


82% of respondents agree that the use of continuous real-time monitoring assists their organisation in combating economic crime.

77% of organisations have a response plan to deal with cyber-attacks, a significant rise from 33% in 2016.

29% of organisations think that cybercrime is likely to be the most disruptive crime in the next 24 months.

Is your organisation part of the move towards greater use of technology, or are you at risk?

3. People are key

Internal fraud actors are increasingly active, accounting for

48% of the most disruptive economic crime experienced.

Abuse of trust and resources is prevalent, with

62% of reported internal fraud being attributed to senior and middle management as the main perpetrators.

One in ten respondents have been asked to pay a bribe in their home country.

Are your awareness programmes targeting the culture of your organisation and region?

4. The traction of detection of fraud and economic crime is growing

 

Routine internal audits are the leading means of fraud detection in organisations.


Formal business ethics and compliance programmes are gaining strength, with the proportion of organisations that have programmes increasing by 3 percentage points to 82%.

Trust and confidence are key: in the past 24 months there has been an increase of 11 percentage points in the reported rate of internal tip-offs, which represents the second most common means of detecting fraud.

The proportion of organisations that have performed a risk assessment at least once within the past 24 months has risen to over 77%
This is marginally higher than the global average.

How much fraud are you detecting – and are you adequately prepared?

Contact us

Nick Robinson
Middle East Forensics Leader, PwC Middle East
Tel: +971 (0) 4 304 3974
Email

John Wilkinson
Senior Partner, Forensic Services, PwC Middle East
Tel: +971 (0) 4 304 3538
Email

Tareq Hadadd
Partner, Forensic Services, PwC Middle East
Tel: +966 (11) 211 0400 (ext 1880)
Email

Achraf El Zaim
Partner, Forensic Services, PwC Middle East
Tel: +971 (0) 4 304 3132
Email

Mohammad Malkawi
Director, Forensic Services, PwC Middle East
Tel: +971 (0) 4 304 3344
Email

Aaqilah Zahra Nagdee
Manager, Forensic Services, PwC Middle East
Tel: +966 (11) 211 0400 (ext 1190)
Email

Timur Korshlow
Director, Data Analytics, PwC Middle East
Tel: +962 (0) 6 500 3486 (ext 3332)
Email

Sion Rhys
Director, E-discovery, PwC Middle East
Tel: +971 (0) 4 515 7479
Email

David Hall
Director, Global Intelligence, PwC Middle East
Tel: +971 (0) 4 5178810
Email

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