BY Fraser Tennant
Fraud, cyber and security incidents are now the “new normal” for companies across the world, according to a new report by Kroll, the global risk consulting company.
In its ‘2016/17 Annual Global Fraud and Risk Report: Building Risk in a Volatile World’, Kroll highlights the escalating threat to corporate reputation and regulatory compliance. Eighty-two percent of the global executives surveyed stated that their company had fallen victim to fraud in 2016 , up from 75 percent in 2015.
Kroll also found that cyber incidents were particularly commonplace, with 85 percent of executives confirming that their company had suffered a cyber incident over the past 12 months. Furthermore, over two-thirds (68 percent) reported the occurrence of at least one security incident over the course of the year, with the theft or loss of intellectual property cited as the most common type.
Although the Kroll report highlights the widespread concerns over external attacks, the data indicates that the most common perpetrators of fraud, cyber and security incidents over the last year were current and former employees. Junior staff were cited as key perpetrators in two-fifths (39 percent) of fraud cases, followed by senior or middle management (30 percent) and freelance or temporary employees (27 percent). Former employees were also identified as being responsible for 27 percent s of reported incidents.
“It’s becoming an increasingly risky world, with the largest ever proportion of companies reporting fraud and similarly high levels of cyber and security breaches,” said Tommy Helsby, co-chairman at Kroll Investigations and Disputes. “The impact of such incidents is significant, with punitive effects on company revenues, business continuity, corporate reputation, customer satisfaction and employee morale.”
In terms of the impact that fraud and security concerns have on overseas expansion, 69 percent of executives admitted that their company has been dissuaded from operating in a particular country or region due to fraud concerns and security threats.
Mr Helsby concluded: “With fraud, cyber and security incidents becoming the new normal for companies all over the world, it’s clear that organisations need to have systemic processes in place to prevent, detect, and respond to these risks if they are to avoid reputational and financial damage.”