Irish Economic Crime Survey 2020
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.
(PDF, 2.3MB)
Incidents of fraud
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.
The perpetrators of fraud
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 cost of fraud
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.
Fraud in the age of COVID-19
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.
Take action: Be prepared
To raise your game in preventing fraud, you should focus on three actions:
Identify, rank and address all your risks. Perform robust risk assessments across your organisation. Consider internal and external factors.
Back up your anti-fraud technology with the right governance, expertise and monitoring. One tool won't address all frauds, and technology alone won't keep you protected.
Take notice of fraud when it happens. Mobilise the right combination of people, processes, and technology to limit the potential damage.
Responding: Doing the right thing
When your organisation experiences fraud, you need to know how to respond, and fast. A consistent approach is key. Did you:
- Conduct investigations?
- Bolster internal controls?
- Improve processes and procedures?
- Make the right disclosures?
- Take appropriate disciplinary actions?
Having the right strictures in place can help you respond during critical moments. It can also strengthen your organisation's defences when the next fraud comes along.
Emerging stronger: Measuring success
42% of Irish respondents say they plan to increase their spend on fraud prevention in the next two years, a reduction from 59% in the last survey. But will the measures work, and will they see a measurable return on their investment? Quantifying the return on investment in fraud prevention can be a challenging exercise. But there is a direct correlation between fraud prevention investments and reduced costs when a fraud strikes. Companies that have a dedicated fraud programme in place generally spend less —relative to revenue—on response, remediation and fines.
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