Adjusting the Lens on Economic Crime: Managing risks, building on opportunities
Our 2016 Global Economic Crime Survey tells a story that we’re all too familiar with: economic crime continues to forge new paths into business, regulatory compliance creates additional stress and burden to doing business responsibly and an increasingly complicated threat landscape challenges the balance between resources and growth.
36% of the more than 6,000 respondents to our global survey report having experienced at least one incident of economic crime. In Belgium, from the 58 participants who took part, that percentage rises to 45%, putting our country in ninth place globally. Despite the high percentage, this year’s result is five percent lower than that of 2014. A decline that’s also seen globally, where there was a marginal one percent decrease. This is the first time it’s gone down since the worldwide financial crisis of 2008-9.
At first glance, this could be evidence of a return on the investments in preventative measures which organisations have been making over the past few years. But on a global level, it could be that this small decrease is actually masking a worrying trend – that economic crime is changing significantly and detection and control programmes are not keeping up with the pace of change.
Despite the evolving threat, we see a seven percent decrease (from 55%) in the detection of criminal activity by methods within management’s control. In Belgium, of the respondents who say they’ve experienced economic crime, only 45% was detected using corporate controls and a significant 21% was worryingly only discovered by accident.
What’s more, one in five organisations (22% on a global level and 18% in Belgium) report not having carried out a single fraud risk assessment in the last 24 months.
What are the risks your business faces and do you actively identify vulnerable areas?
How will your cyber-response plan stand up to reality?
How prepared is your business to face an internal or external threat?
Today more than ever before, a passive approach to detecting and preventing economic crime is a recipe for disaster. To underscore this fact, our survey uncovered a widespread lack of confidence in local law enforcement – a phenomenon that is not limited to regions or level of economic development. The message is clear: the burden of preventing, protecting and responding to economic crime rests firmly with organisations themselves.
Our survey this year focuses on two key areas – cybercrime and business ethics & compliance programmes– and explores certain common themes, including managing the risks associated with the pervasion of technology; what it means to conduct business responsibly across a widening business landscape; and integrating ethical conduct into decision making.
In addition to highlighting specific areas of economic crime worth focusing on, we emphasise the things you can do better to tackle them – implementing more sophisticated and effective measures that can not only reduce these risks, but also bring the benefits of a more threat-aware business, confident of its defences in a changing world.
Economic crime is ever-evolving, and becoming a more complex issue for organisations and economies. The regulatory landscape, is also changing, bringing with it numerous challenges to doing business. With local law enforcement not necessarily perceived as able to make a material difference, the onus is squarely on the shoulders of the business community to protect itself, and its stakeholders, from economic crime. As we discuss in the two upcoming sections – dedicated to the strategically crucial areas of cybercrime and ethics and compliance programmes – our survey numbers can help uncover not only potentially troublesome red flags and trends. They can also serve as vitally important indicators of areas of opportunity for forward-thinking organisations to meet the challenges of a whole new world. To be forewarned is to be forearmed for success.