UK companies face cybercime threat

Companies and organisatons polled in the UK and in Europe said the threat of cybercrime fraud was their biggest fear and rated cybercrime as the number one fraud risk of the future.

Currently, 13% of all economic crimes are the result of cybercriminal activities.

The PwC survey found almost three-quarters of UK companies had been the victim of economic crime in the previous two years, with the overwhelming majority of these frauds committed by company employees.

Three-quarters of UK organisations said their risk of exposure to fraud would either remain the same or increase in the future.

And company employees continue to remain the biggest security threat. Nine-out-of-ten fraudulent activities are the work of company employees, who use embezzlement and breach of trust to commit their crimes, the report found.

Another area of concern will be the high number of unreported frauds, with a third of organisations choosing not to report crimes to authorities and prevention of corporate fraud was no better.

This was blamed on the associated consequences of fraud such as negative publicity, a drawn out judicial process and the small chance of prosecution and recovery of stolen assets.

But an encouraging sign was the fact that half of frauds discovered were the result of tip-offs, reflecting the establishment of more effective corporate governance procedures in the UK, compared with Europe where the number of tip-offs were far lower.

Across Europe, fraud continued to take its toll on big business, with losses estimated at euros 3.6bn (Pounds 2.19bn) in the last two years alone.

Andrew Clark, head of UK investigations at PwC, said fraud continued to be a major impediment to doing business for all organisations in Europe.

‘Although an increasing number of companies are becoming alive to the risks of fraud,’ he said, ‘too few take the necessary steps of prevention or adequately equip themselves to detect fraud.

‘It is critical that companies start to treat fraud as a fundamental business challenge and dedicate sufficient time and resources to tackle the problem,’ Clark added.

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Hi-tech crime costing companies billions