Fraud and economic crime is an evolving challenge, particularly at a time of crisis. Our research and analysis reveal fascinating insights into the need to manage responses, shore up defences and prepare to meet the challenges ahead.
The Irish Economic Crime and Fraud Survey is part of a global initiative, gathering data from more than 5,000 respondents in 99 countries. Over 70 Irish organisations took part representing every sector and industry.
of Irish respondents experienced economic crime in the last 24 months.
of fraud incidents reported were committed by external perpetrators.
respondents reported losing over €5-million to fraud over the last 24 months.
said they did not know how much they had lost to economic crime.
The most prevalent types of economic crime or fraud in Ireland in 2020 are cybercrime, customer fraud and asset misappropriation. Given that Ireland is Europe's largest data hosting cluster, cybercrime being the most mentioned type of incident for organisations to deal with is a concern. The incidence of customer fraud, the illegitimate use of a company's products or services, could be a significant development, as more industries shift to direct-to-consumer strategies as a result of the coronavirus pandemic.
Perpetrators of fraud can be internal or external, and in some instances, there may have been collusion. 69% of incidents reported by Irish respondents were committed by external perpetrators, compared to 39% globally. This is not surprising given that cybercrime was reported as the most prevalent type of fraud in Ireland. A company's biggest fraud blind spot is often the people with whom it does business: third parties, agents, suppliers and customers.
The losses caused by fraud are complex. Some costs are quantifiable: direct financial losses or costs due to fines, penalties and remediation. But some costs are not easily quantified including brand damage, loss of market position and employee morale. It is worrying that one-fifth of respondents admitted to either not knowing how much they had lost to economic crime, or said that the loss was immeasurable.
COVID-19 has had a huge impact on people, society and business. In times of crisis, fraud proliferates, as we have observed since the outbreak began. As organisations attempt to operate with a leaner staff and lower cost base, they are likely to find themselves caught in a perfect storm for fraud. Pressures motivating employee fraud are higher, at the same time that defenses intended to safeguard against it is weaker.