Financial services industry leads in fraud increases.

Author:Cain, A.
Position:UPDATE
 
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THE GLOBAL FINANCIAL SERVICES INDUSTRY WAS hit hardest by fraudulent activity, with companies losing an average of US $15.2 million over the past three years, according to the 2009-2010 Kroll Global Fraud Report. More than half of the respondents in the financial sector reported that the global financial crisis had increased fraud levels at their organizations, with theft of physical assets or stock (31 percent) and internal financial fraud (29 percent) being the most common types. The study, conducted by the Economist Intelligence Unit, surveyed more than 700 senior executives worldwide.

Out of 10 industries surveyed, half experienced a sharp increase in fraud activity, while the remaining half saw a decline. Industries experiencing the greatest decline were consumer goods; construction, engineering, and infrastructure; and natural resources.

Overall, companies worldwide lost an average of US $8.8 million to fraud over the past three years, the report notes, an increase of 7 percent over Kroll's 2008 study. "Traditionally, every downturn brings about a rise in fraud, but what we are seeing in 2009 is something far more complex," says Blake Coppotelli, senior managing director in Kroll's Business Intelligence and Investigations Unit in New York. "Companies are seeing greater vulnerability due to reduction in internal controls, pay cuts, and reduced revenue across the board, but counteracting this increased risk are the realities of...

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