It is an open secret that fraud and economic fraud are not going anywhere: all that the industry can do is mitigate their occurrences.
The current business environments have also experienced an upsurge in fraud and many business participants have investigated the factors involved in fraud and corruption.
A survey carried by global audit firm PwC has revealed some interesting trends in that regard, and mainly how Kenyans have been affected.
The year so far has seen a drop in reported cases of fraud, and this conclusion was arrived at after a 24-month review period.
The firm interviewed more than 5000 people across the globe, 102 of which were based in the country.
In that period. KES 5.5 billion was lost by Kenyan respondents. Out of that sample size, 58 percent reported they experienced economic crimes in the last 24 months, down from 75 percent reported in 2018. However, the percentage is still higher than the world average of 47 percent.
Furthermore, PwC says that the most common cases of fraud are bribery and corruption, procurement fraud, asset misappropriation, and customer fraud.
You ask – who is committing these crimes? And well, there is an answer for you: internal people are mentioned extensively, and account for 36 percent of the perpetrators, followed by collision between internal and external player at 32 percent and lastly, external players at 27 percent.
Examining internal perpetrators reveals that operational staff are notorious as far as fraud cases are concerned. Middle management is also part of the problem, followed by senior management.
In Kenya, for instance, 36 percent of the respondents experience economic crimes and lost over KES 100 million, with 2 percent losing over KES 0.5 billion.
Technology’s play
Businesses are continuously adopting the use of computer tools and technology. These products and services keep getting complicated.
“As this happens, attacks aimed at the systems or designed to utilize these systems also become more sophisticated in scale and methodology. As such, organizations have no option but to invest in ever more complex anti-fraud technology,” reads a statement from the survey.
On the bright side of things, it appears that technology investments are paying off in terms of their value when combating fraud, at least to some extent. Communications monitoring and transaction monitoring and testing have been instrumental in that regard, and so are governance risk and compliant solutions and anomaly detection.
On the whole, it has been established that the impact of fraud is detrimental to all societies, which also explains poor economic performance especially in the context of developing economies like Kenya.
