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Fraud and security risks 'the new normal' for businesses

Security incidents, fraud and cyber threats have become the "new normal" for businesses all over the world, a recent study has warned.

Risk consulting firm Kroll conducted a survey of executives for its 2016-17 Global Fraud and Risk Report. More than two-thirds (68 percent) of respondents said their organisation had experienced at least one security incident over the past year.

More than four out of five (82 percent) had fallen victim to some sort of fraud, up from 75 percent in 2015 and 70 percent in 2013. Theft of physical assets was the most common form of fraud in 2016, with 29 percent of companies experiencing it, compared with 22 percent in the previous year.

When it comes to evaluating risks and thinking about the appropriate security measures to protect against them, it's natural for businesses to look outside their organisation at external threats.

However, the Kroll research revealed that the most common perpetrators of fraud, cyber attacks and security incidents over the past year were current or former employees.

More than half (56 percent) of the companies taking part in the survey said insiders were the key figures in security incidents, with former employees the most common offenders (23 percent).

The majority (60 percent) of organisations affected by some kind of fraud said there was a combination of perpetrators, including current workers, former staff and third parties. Half (49 percent) said all three groups were involved in the incident.

Looking specifically at UK trends, Professional Security noted that British businesses are at or near the top of the global rankings for reporting security incidents, fraud and cyber crime.

Nine out of ten UK respondents (90 percent) said they had been affected by fraud over the past year - a significant rise from 74 percent in 2015 and higher than the global average of 82 percent.

Overall, the latest Global Fraud and Risk Report showed the highest ever proportion of companies across the board reporting fraud, as well as relatively high levels of security breaches and cyber threats.

Tommy Helsby, co-chairman, Kroll Investigations and Disputes, said the findings showed that "it's becoming an increasingly risky world".

Discussing trends in the UK, he said: "One reason for the growth in reported incidents by UK organisations could be that companies are simply more aware of their responsibilities and vulnerabilities and have now accepted that managing and reporting fraud, cyber and security incidents is part of 'business as usual'.

"It's clear that as well as recognising the risks, UK organisations need to have systemic processes in place to prevent, detect and respond to fraud, cyber and security risks if they are to avoid reputational and financial damage."

Other findings from the Kroll study showed that more than six out of ten organisations (63 percent) had been discouraged from operating in a particular country or region because of security concerns.

 

Posted by Julie Tucker

 

Image courtesy of iStock/kadmy

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