Tech, Media & Telco are the businesses worst hit by fraud
Tech, media and telecommunication sectors are the worst hit by fraud. Close to two-thirds of companies in these businesses have experienced some form of fraud – the highest incidence of any industry. Cybercrime tops the list of current threats facing businesses. Organisations’ perimeters are vulnerable, and external fraudsters are becoming a bigger threat as attacks increase and become more sophisticated, according to consultancy PwC´s Global Economic Crime and Fraud survey 2022.
”The growing maturity of the technology, media and telecommunications sector helped it identify a significant increase in fraud activity since 2020 with nearly two-thirds of companies experiencing some form of fraud, the highest incidence of all industries.”
46% of all organisations in the survey reported they had faced fraud or financial crime over the last 24 months. 70% of them have experienced new incidents of fraud as a result of COVID-19 disruptions.
Crime rates remain stable, but impacts are substantial for companies with revenues exceeding USD 10 billion, with one in five reporting a fraud incident costing more than USD 50 million.
Emerging risks are ESG (environmental, social and governance) reporting and supply chain fraud have the potential to cause greater disruption over the next few years, the report says.
”The survey of 1,296 business leaders from across 53 countries found that cybercrime, customer fraud and asset misappropriation were the most common crimes experienced by organisations, regardless of revenue.”
”Among companies with global annual revenues over USD 10 billion, 52% experienced fraud during the past 24 months. Within that group, nearly one in five reported that their most disruptive incident had a financial impact of more than USD 50 million.”
”The share of smaller companies (those with less than USD 100 million in revenues) affected was lower; 38% experienced fraud, of which one in four faced a total impact of more than USD 1 million.”
The report says that rise of digital platforms opens the door to myriad financial crime risks, and 40% of those encountering fraud experienced some form of platform fraud.
In the survey results, cybercrime came in ahead of customer fraud, the most common crime in 2020, by a substantial margin. 42% of large businesses reported experiencing cybercrime in the period, while only 34% experienced customer fraud.
“Environmental, geopolitical, financial and social pressures are creating a risk landscape that is more volatile than ever. At the same time, we’re seeing an increase of threats from outside the organisation as bad actors form fraudster groups to infiltrate digital platforms. Organisations need to be more agile than ever to respond to these converging threats, and adopt new approaches and technologies to predict and prevent fraud”, says Kristin Rivera, PwC Global Forensics Lead.
The survey shows that the rise of digital platforms, such as social media, services (rideshare, lodging) and e-commerce, opens the door to fraud and economic crime risks.
The survey says that threats from external entities are increasing, with perpetrators quickly growing in strength and effectiveness. Nearly 70% of organisations experiencing fraud reported that the most disruptive incident came via an external attack or collusion between external and internal sources.
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