- 47% of companies report experiencing fraud in the last two years - the second 
highest reported level in 20 years 
- Customer fraud sees the biggest increase in the last two years, up from 29% 
to 35%
- Customers, hackers and vendors/suppliers are responsible for 39% of all 
incidents in the last two years

Fraud and economic crime rates remain at record highs, impacting companies in 
more ways than ever. PwC's bi-annual survey of business crime reports that 
fraud committed by customers tops the list of all crimes experienced (at 35%), 
up from 29% in 2018. Businesses report that customer fraud and cybercrime are 
the most disruptive of all the crimes.

Although fraud committed by customers is on the rise, it is also one of the 
types where dedicated resources, robust processes and technology have proven 
most effective for prevention.

Globally, all regions experienced customer fraud in the last two years, with 
the Middle East (47% up from 36%) and North America (41% up from 32%) seeing 
the biggest increases.

The Global Economic Crime and Fraud Survey examines over 5000 responses from 99 
countries. It reports on the overall insights from companies who have 
experienced on average six incidents over the last two years. The report 
provides insights into the threat, cost of fraud and what companies need to do 
to develop stronger proactive responses.

The report highlights the importance of prevention and how investing in the 
right skillset and technology can create an advantage.  Nearly half of 
organisations responded to crime by implementing and enhancing controls, with 
60% saying their organisations were better for it.  

However nearly half of respondents did not conduct an investigation at all. 
Barely one third reported the crime to their board, but of the organisations 
who did, 53% ended up in a better place. 

"Fraud and economic crime is a never- ending battle. Getting to the root of the 
problem is key to preventing and dealing with future fraud. Whether it's 
through technology, new processes, skills and training, or a combination - the 
result is strengthening business as a whole against crime, which is ultimately 
good for the consumer too." comments Kristin Rivera, PwC Global Forensics 
Leader. 
 The perpetrators: Who's committing the fraud

Fraud hits companies from all angles - the perpetrator could be internal, 
external or in many instances there is collusion.
 
- In the last two years, 39% of respondents said external perpetrators were the 
main source of their economic crime incidents. 
- One in five respondents cited vendors/suppliers as the source of their most 
disruptive external fraud. 
- 13% of respondents who experienced fraud in the last two years reported 
losing more than US$50 million.  
- Antitrust, insider trading, tax fraud, money laundering,  and bribery and 
corruption are reported as being the top five costliest frauds in terms of 
direct losses - sometimes compounded by the significant cost of remediation. 

Taking action and being prepared

While technology is just part of the answer in fighting fraud, the report finds 
that more than 60% of organisations are beginning to employ advanced 
technologies such as artificial intelligence and machine learning to combat 
fraud, corruption or other economic crime. However, concerns about deploying 
technology are linked to cost, insufficient expertise and limited resources. 
28% say it's because they struggle to see its value.

The benefit in using technology to fight fraud is undeniable but organisations 
must recognise that using tools or technology alone does not amount to an 
anti-fraud programme. 

"Collecting the right data is just the first step. How the data is analysed is 
where companies will have an advantage when fighting fraud. Companies often 
fail to see the value in technology when they don't invest in the right skills 
and expertise to manage it" comments Kristin Rivera, PwC Global Forensics 
Leader.

Notes:

1. Download the report at www.pwc.com/fraudsurvey. 
2. Customer fraud is defined as fraud against a company through illegitimate 
use of, or deceptive practices associated with, its products or services by 
customers or others (e.g. mortgage fraud, credit card fraud). 
3. Cybercrime features in the top three most disruptive crimes experienced in 
almost all industries reported in the survey - Financial Services (15%), 
Industrial Manufacturing and Automotive (15%), Technology, Media and 
Telecommunications (20%), Consumer Markets (16%), Government and public sector 
(17%), Health Industries (16%). 
4. Globally, all regions report experiencing customer fraud in the last two 
years:  Middle East (47%), Africa (42%), Asia Pacific (31%), Europe (33%), 
Latin America (33%), North America (41%). 
5. PwC highlighted the global issue of upskilling in its 23rd CEO survey and 
identified that whilst retraining/upskilling was seen as the best way to close 
the skills gap, only 18% of CEOs have made 'significant progress' in 
establishing an upskilling programme. In order to take advantage of what 
technology can do for your organization, hiring the right people to work 
alongside new technologies is important. This is apparent even when hiring 
staff to support advanced technologies such as artificial intelligence and 
machine learning to uncover fraud.

About PwC

At PwC, our purpose is to build trust in society and solve important problems.  
We're a network of firms in 157 countries with over 276,000 people who are 
committed to delivering quality in assurance, advisory and tax services. Find 
out more and tell us what matters to you by visiting us at www.pwc.com. 

PwC refers to the PwC network and/or one or more of its member firms, each of 
which is a separate legal entity. Please see www.pwc.com/structure for further 
details.

(C) 2020 PwC. All rights reserved

Contact:
Marian Diyaolu 
Mobile: +44-7483407064 
Email: marian.diyaolu@pwc.com

Source: PwC