Insider attacks the main cause of rising fraud: survey

Kroll's latest report, based on a survey of 768 executives from across the globe and a wide range of industries, found that three quarters of companies polled have been victims of fraud over the past 12 moths. This figure has risen by 14% over the last three years, according to figures from fraud and security specialist Kroll. Its latest survey reveals that the biggest threat of fraud comes from within companies. Of those firms where fraud occurred and the perpetrator was identified, four in five (81%) suffered at the hands of at least one insider. This is up from 72% in the previous survey. More than one in three victims (36%) experienced fraud from their own senior or middle management, 45% suffered at the hands of a junior employee and 23% from the conduct of an agent or intermediary.hideThe survey paints a similar story on data loss or theft. Employee malfeasance was the most common cause of information/data loss, theft or attack over the past 12 months. It caused 45% of all incidents. Vendor/supplier malfeasance was involved in 29% of cases. A small minority of data loss cases involved an attack from an external hacker on the company itself (2%) or on a vendor/supplier (7%). Tommy Helsby, Chairman of Kroll, commented: "Much media attention is focused on external threats to companies, highlighted by high profile cyber attacks, but the evidence revealed in our report and our day-to-day experience tells a different story. The respondents in this survey indicate the greatest single cause of fraud in their companies is their own employees. It is not enough for companies to protect themselves from outside threats-both external and internal vulnerabilities need to be addressed." More generally the survey found that 69% of businesses suffered financial loss as a result of fraud in the last year, up from 64% in the previous survey. Theft of physical assets was the most common type of fraud (22%), followed by vendor, supplier or procurement fraud (17%) and information theft (15%). The vast majority of respondents (80%) believe their organisation has become more vulnerable to fraud in the past year. A third of survey respondents cite high staff turnover as the main driver of increased fraud exposure. The next highest driver was greater outsourcing at 16%. More than half of respondents (51%) believe they are highly or moderately vulnerable to information theft. 49% feel highly or moderately vulnerable to vendor, supplier or procurement fraud. Some 40% of respondents felt highly or moderately vulnerable to corruption and bribery. In the past year, 72% of companies surveyed decided not to operate in a particular country or region because of its heightened exposure to fraud. Latin America-cited by 27% of all respondents-was the region most likely to be avoided. Africa was not far behind on 22%. "What our report and our day-to-day experience tell us is that despite companies making greater and more sophisticated efforts to combat fraud, it remains a serious business threat that cannot be completely eliminated. Furthermore, the adverse impacts of such incidents cannot be underestimated," said Mr Helsby.

Insider attacks the main cause of rising fraud: survey

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