Global and Swiss Economic Crime Survey 2014

 

Economic crime has become a truly borderless threat, one that is likely to attack many of your business processes — often without your knowledge, and often from inside. Facilitated by economic events, natural disasters, and the innovations reshaping our world, new criminal trends are constantly emerging across geographies and industries. It has never been more critical to understand the adversaries you face, or the exact nature of the threats your organisation is exposed to.

 

Highlights of the Swiss Economic Crime Survey 2014 are:
 

Incidents of fraud have not lessened.

The percentage of respondents having experienced economic crime in the last 24 months increased from 18% to 37%.

Cybercrime is here to stay.

26% of Swiss respondents that were affected by economic crime, reported incidents of cyber-attacks at their company. Although awareness of cybercrime has improved, a significant percentage of respondents were not able to determine the extent of damage to their organisation caused by this type of crime.

The amount of reported bribery and corruption decreased.

Only 3% of Swiss respondents that have been affected by economic crime over the past 24 months reported incidents of bribery and corruption despite operating in high-risk countries. However, a significant number recognise it as a major threat, with 37% ranking this type of economic crime as the greatest risk to their organisation when doing business globally.

The return of the traditional fraudster.

This year we have observed the return of the traditional fraudster who is male, between the age of 31 and 50 and has been with the company for several years. We also see that Swiss companies are more stringent in dealing with internal infractions; more of them are choosing to dismiss or even take civil action against the fraudster.

The effectiveness of corporate culture in detecting economic crime has improved.

This year’s survey shows that, whilst the overall effectiveness of corporate controls has remained relatively unchanged during the survey period, there has been an increase of fraud detected thanks to corporate culture (from 24% in 2011 to 35% in the past 24 months). This suggests heightened awareness of the need to foster an anti-fraud corporate culture at Swiss companies.

 

Highlights of the Global Economic Crime Survey 2014 are:
 

Economic crime is a persistent threat to business and business processes.

37% of respondents reported economic crime.

The schemes used may vary, but the global threat remains.

Respondents from 79 territories reported experiencing economic crime.

Economic crimes of a “systemic” nature represent a greater risk than “episodic” frauds.

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.

Economic crime threatens a wide variety of business processes.

Selection of Business Processes Threatened by Economic Crime

  • Sales (or selling)
  • Marketing
  • Bidding
  • Procurement
  • Payments
  • Vendor selection
  • Distribution
  • Logistics
  • Access to commodities and resources
  • Supply chain operations
  • Customer "on-boarding"
  • International expansion
  • Tax compliance
  • Facilities construction, leasing and operations
  • Hiring and recruiting
  • Suspicious transaction reporting
  • IP development and deployment
  • Data security and privacy
  • IT network operations
  • Employee expense reimbursement

Cybercrime reports continue to rise.

It is the fourth-most reported type of crime in this year’s survey. However, cybercrime is not just a technology problem. It is a business strategy problem.

The effectiveness of internal controls in detecting economic crime has improved.

Over the 14 years we have been conducting our Global Economic Crime Survey, the effectiveness of internal controls in detecting economic crime has improved. 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 follows megatrends.

Economic crime follows 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.

There was a relative increase of 13% in reported incidences of bribery and corruption.

There was a relative increase of 13% in reported incidences of bribery and corruption since our last survey; the 17th Annual CEO survey reveals that more than half of CEOs are concerned about bribery and corruption.


Further Information on the Global Economic Crime Survey