global economic crime & fraud survey - comfi · belgium 57 % employ more than 1000 employees 70...

Global Economic Crime & Fraud Survey

Belgian results

PwC

Key survey results

Cybercrime

Use of technology

Contents

Global Economic Crime & Fraud Survey – February 2018 2PwC

PwC

Key survey results

3

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Size, scale and depth of the surveyGlobal

4

Respondents

60%employ more than 1000 employees

57%have offices in more than one country

54%have global revenues exceeding $100m dollar

33%even exceeding$1b dollar

Industry sectors

22%Financial services

11%Manufacturing

9%Energy, Utilities and Mining

6%Retail and consumer

5%

Technology

5%

Pharmaceuticals and life sciences

5%

Engineering & Construction

Participationstatistics

7,228completed

surveys

123countries

Across

Global Economic Crime & Fraud Survey – February 2018

PwC

Size, scale and depth of the surveyBelgium

57%

employ more than 1000 employees

70%

have offices in more than one country

69%

have global revenues exceeding $100m dollar

48%

even exceeding $1b dollar

62completed

surveys

16%Financial services

10%Manufacturing

10%Chemicals

8%Automotive

8%Insurance

8%Technology

6%Retail and consumer

Global Economic Crime & Fraud Survey – February 2018 5

Participationstatistics

Respondents Industry sectors

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The biggest competitor you didn’t know you hadSignificant jumps in reported frauds

6Global Economic Crime & Fraud Survey – February 2018

How many organisations experienced economic crime in the last 2 years?

49%

Belgium (2016: 45%)Globally (2016: 36%)

65%

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Types of economic crime experienced

7

Global

45%

31%

29%

25%

22%

20%

64%

32%

24%

23%

18%

Asset misappropriation

Cybercrime

Fraud committed by theconsumer

Bribery and corruption

Procurement fraud

Accounting fraud

2018

2016

Belgium

53%

30%

28%

18%

13%

10%

10%

65%

50%

19%

15%

8%

Cybercrime

Asset misappropriation

Fraud committed by theconsumer

Procurement fraud

Businessconduct/misconduct

Bribery and corruption

Accounting fraud

2018

2016

*

* Not measured in 2016

Global Economic Crime & Fraud Survey – February 2018

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How was the fraud detected?


• Corporate controls are the largest contributor to detection of respondents indicating that the most disruptive fraud was initially detected by this method.

• However, more than ¼ of the fraud is detected through tip-offs or hotlines - a trend that is likely to continue to grow, given increased attention for whistle-blowing hotlines.

Global Belgium

Corporate Controls

Corporate Culture

Beyond theinfluences of management

14%

13%

13%

5%

4%

2%

13%

7%

7%

8%

4%

2%

4%

3%

Internal audit (routine)

Fraud risk management(general controls)

Suspicious activity monitoring

Corporate security (both IT andphysical security)

Data Analytics

Rotation of personnel

Tip-off (internal)

Tip-off (external)

Whistleblowing hotline

By accident

By law enforcement

Investigative media

Other detection method

Don't know

7%

17%

13%

10%

0%

0%

23%

0%

3%

10%

0%

0%

10%

7%

Internal audit (routine)

Fraud risk management(general controls)

Suspicious activity monitoring

Corporate security (both IT andphysical security)

Data Analytics

Rotation of personnel

Tip-off (internal)

Tip-off (external)

Whistleblowing hotline

By accident

By law enforcement

Investigative media

Other detection method

Don't know

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Impact of economic crime


Businessrelations

Reputation and brand strength

Relation with regulators

Employee morale

48% 38% 37% 30%Global

Belgium 31% 15% 20% 5%

% of respondents indicate they’ve experienced a medium or high impact

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Financial impact of economic crime

10Global Economic Crime & Fraud Survey – February 2018

43% 30%

of the Belgian respondents indicate the estimated financial

impact is below 25,000$

of the Belgian respondents indicate the estimated financial impact is between

100,000 and 1,000,000$

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(Fraud) risk assessmentsIn the fight against fraud there is significant untapped potential


Overall, the percentage of companies that perform a risk assessment is rather low. It is however shown that entities in Belgium respond to the increased risk of cybercrime with increased attention for cyber (61%) compared to global (46%).

Global Belgium

54%

33%

19%

23%

16%

46%

30%

27%

2%

10%

General fraud risk assessment

Anit-Bribery and corruption

Sanctions and export controls

AML

Anti-competitive / Anti-Trust

Cyber-attack vulenerability

Cyber response plan

Industry specific regulatoryobligations

Other

No risk assessment performed inthe last 24 months

Base: 6699Source: Global Economic Crime & Fraud Survey 2018

In the last 24 months, has your organisation performed a risk assessment on any of the following areas?

51%

22%

22%

27%

20%

61%

35%

33%

2%

8%

General fraud risk assessment

Anit-Bribery and corruption

Sanctions and export controls

AML


Cyber-attack vulenerability

Cyber response plan

Industry specific regulatoryobligations

Other

No risk assessment performed inthe last 24 months

Base: 51Source: Global Economic Crime & Fraud Survey 2018

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Combating economic crime


Respondents that increased their financial commitment to

combating economic crime the past 2 years:

However, also more than half of the global and Belgian respondents do not plan to increase spending despite the fraud jumps and the increasing technology and pervasiveness.

Companies that will continue

to increase it’s spending the next 2 years:

42%

47%

44%

43%

Global

Belgium

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Combating economic crime


External actors

In Belgium there are much more external actors than internal, due to more cybercrime and more developed internal control frameworks.

Internal actors

40%

70%

52%

27%

Global

Belgium

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Cybercrime

14

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Cybercrime: Belgium’s number one threat And most disruptive, now and in the future

15

The most common economic crime in Belgium:

Which kind of crime was the most disruptive?

• Cybercrime: 38%

• Fraud committed by the consumer: 18%

• Asset misappropriation: 10%

of the Belgian respondents believe that cybercrime will continue to be the most

disruptive in the next 24 months outperforming other types of crime.

62%

53% Cybercrime

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Cybercrime techniques

With cyber-attack as the leading crime in terms of number of incidents reported in this study, we also noticed that the most ‘popular’ techniques of cybercriminals are:

• Phishing: 66%

• Malware: 56%

• Network scanning: 16%

PwC Global Economic Crime & Fraud Survey – February 2018

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Consequences of cybercrime in Belgium

• 31% of cybercrime attacks caused disruption in business processes

• In 28% of the cases assets were misappropriated

• Intellectual property theft only reported by 2%

• 20% of the Belgian respondents indicated that they don’t know what the exact consequences are. So in many cases, companies might not know if there were serious consequences, which is alarming because there might have been data loss or IP theft!


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Cyber risk assessments

• As already indicated, there’s more attention for assessing the company’s cyber attack vulnerability (61%).

• 66% of the Belgian respondents worked on Cyber Security Programmes the last 24 months. Cyber Security Programmes were installed by 55% of respondents, up from 37% in 2016.

• 11% of the companies have a plan that is not fully implemented or operational.

• It’s worrying that the companies don’t seem to assess the quality of their cyber response plan: only 35% of the Belgian companies indicated they performed an assessment on their plan.


This increased attention is a good result, but there’s still room for improvement!

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Use of technology

19

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Too little use of technology


Still a large part of the Belgian respondents has not yet fully adopted the new technologies such as Artificial Intelligence, data analysis, pattern detection or communications monitoring.

To what extent do you use technology as an instrument to monitor fraud and/or economic crime in each of the following areas?

To what degree is your organisation leveraging Artificial Intelligence or Advanced Analytics to combat/monitor for fraud and other economic crime?

48%

12%

17%

12%

9%

19%

12%

7%

7%

33%

17%

41%

29%

31%

14%

22%

14%

34%

12%

26%

26%

36%

33%

24%

29%

53%

34%

7%

45%

16%

22%

28%

43%

36%

26%

24%

Cyber-attacks /Vulenerabilities

AML Detection

Anit-Bribery and Anti-Corruption

Third Party Due Diligence

Sanction Screening

Export Screening

Expert Contols


Business Conduct

Primary monitoring technique Part of a wider program of monitoring

Do not use technology for monitoring Don't know

17%

13%

51%

58%

57%

68%

55%

28%

36%

38%

28%

28%

Machine learning

Natural LanguageProcessing (NLP)

Natural LanguageGeneration (NLG)

Voice Recognition

Predective Analytics

Using and finding value Using but not finding value

Plan to implement in the next 12 months Under consideration

No plans to use Don't know

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Too little use of technology


To what degree is your organisation using/considering the following alternative/disruptive technologies and techniques in your control environment to help combat fraud and/or economic crime?

45%

43%

26%

26%

38%

11%

11%

25%

21%

21%

8%

30%

8%

8%

8%

8%

9%

13%

13%

21%

11%

15%

9%

9%

19%

17%

9%

19%

26%

15%

19%

13%

17%

21%

21%

26%

32%

34%

25%

36%

25%

30%

19%

49%

53%

21%

11%

30%

25%

13%

38%

26%

23%

30%

23%

28%

21%

26%

30%

Periodic Analysis

Continuous Monitoring

Proactive Detection

Transaction Testing

E-mail monitoring

Contract or other unstructured data review

Leveraging big data

Data Visualization/ Dashboards

Communications Monitoring

GRC Solutions

Pattern Recognition

Anomaly Detection

Artificial Intelligence

Employing data scientists

Using and finding value Using but not finding value Plan to implement in the next 12 months

Under consideration No plans to use Don't know

Contacts

22

Forensic Services Leaders BE

Rudy HoskensPartner Forensic Services+32 (0)2 710 43 [email protected]

Stefan FranciniDirector Forensic Services+32 (0)2 710 41 [email protected]

© 2018 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers

LLP, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a

separate legal entity. Please see www.pwc.com/structure for further details. This document is for general information

purposes only, and should not be used as a substitute for consultation with professional advisors.

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