Economic crime against financial firms increases

Economic crime against financial services organisations continues to rise around the world, according to recent research by PwC. The advisory firm’s 2014 Global Economic Crime Survey reveals that 45% of financial services respondents say they have been victims of economic crime.

The survey, which includes 1,330 responses from the financial services sector across 79 countries, found that theft remains the most common form of economic crime for financial services firms, reported by 67% of respondents. It is followed by cybercrime, 39%, money laundering, 24%, accounting fraud, 21% and bribery and corruption, 20%.

While the survey identifies cybercrime as the second most common type of economic crime, PwC warns that the 39% figure seems alarmingly low. It says that its experience has shown that a clear majority of financial services organisations (especially retail banks) suffered cybercrime during the survey period.

“Less than 40% of economic crime in the financial services sector was reported as cybercrime in our survey. In our experience, financial services organisations do not always identify and log the cyber-element of economic crime experienced,” said Andrew Clark, partner in PwC’s forensics practice. “This leaves them exposed to cyber threats in spite of any existing cyber defence: if cybercrime is not being accurately tracked, the true risk of cybercrime cannot be fully grasped and understood.”

PwC explains that external fraudsters are still the main perpetrators of economic crime for the majority of financial services organisations (57%). Most internal frauds are committed by junior staff (39%) and middle managers (39%), with a fifth of internal economic crime committed by those in senior management.

The profile of the typical financial services internal fraudster is a male between 31-50 years old with a university level education.

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