The UK has seen a double-digit rise in economic crime against corporates in the last two years – with cybercrime now the fastest growing type of economic crime in the UK.
According to the biennial PwC Global Economic Crime Survey, 55 per cent of the 6,000 organisations polled have been affected, an increase of 11 percentage points since 2014, significantly outstripping the level in countries such as the US (38 per cent) and China (28 per cent). Globally, the economic crime rate has remained largely static at 36 per cent.
PwC’s survey also reveals that 60 per cent of economic crime in the UK was committed by external perpetrators, up from 56 per cent in 2014.
Cybercrime has experienced the fastest growth of all economic crime. Some 44 per cent of UK organisations that had experienced economic crime in the last 24 months were affected by cyber incidents, a jump of 20 percentage points from 2014 – and substantially higher than the global response of 32 per cent.
The rise of cybercrime is in stark contrast with some of the traditional forms of economic crime, including bribery, asset misappropriation and procurement fraud, which have declined.
Just over half of UK organisations say they expect to be the victim of cybercrime in the next two years, suggesting it will become the UK’s largest economic crime. Almost a third of UK entities have no cyber response plan in place.
The Global Economic Crime Survey found that 45 per cent of internal fraudsters had worked for more than five years within the organisation they defrauded and 21 per cent had more than a decade of service. In contrast, the number of junior staff carrying out economic crime has fallen since 2014 from 45 per cent to 28 per cent.
While the vast majority of UK organisations have formal business ethics and compliance programmes in place, far fewer (63 per cent) back up these rules with regular training and communication. Moreover, frauds that staff typically commit, such as accounting and HR fraud, have risen in number in the last two years.
Question of culture
John Tracey, forensics leader at PwC in the Midlands, commented: “Economic crime is a question of culture, not just compliance. Even the best compliance programmes will fail if a company’s culture accepts wrong-doing as a norm.
“While it is encouraging that so many UK organisations understand the value of having a code of conduct, it’s crucial to back it up through regular training and engagement with employees. Unfortunately our survey shows this just isn’t happening enough.
“Hackers are now more ambitious than ever. Their aim goes beyond targeting financial information to include a company’s ‘crown jewels’ – customer data and intellectual property information, the loss of which can bring down an entire business.”
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