Cybercrime increased considerably with over 40 percent of respondents affected by it, making it the second most common fraud reported after asset misappropriation, according to a survey just released.
Sixty-one percent of the respondents from the U.S. indicated their perceived risk to the enterprise from cyber crime increased over the previous twelve months, according to the 2011 Global Economic Crime Survey, conducted by PricewaterhouseCoopers (PwC). The survey included 3,877 respondents from 72 countries, with sixty percent of those identifying themselves as senior-level directors or executives
In contrast, the survey indicates only 15 percent of C-level executives review risks presented by cybercrime once per year, and as many as one-third do not review cybercrime risks or only do so after a reported breach event.
“Clearly, many executives have yet to seize upon the serious nature of the cybercrime threat. Cybercrime has emerged as a formidable threat, thanks to deeply determined, highly skilled, and well-organized cybercriminals, from nation states to hacktivists, from criminal gangs to lone-wolf perpetrators. Organizations need to be aware and adjust to this changing landscape,” said Didier Lavion, principal in PwC’s forensic services practice.
The report also found of the 70 percent of U.S. organizations that reported they perform fraud risk assessments, nearly two-thirds only do so once per year. Worldwide, less than sixty percent of organizations regularly perform fraud risk assessments.
“Fraud remains an often unmeasured and unseen siphon on organizational resources. Without the proper controls to prevent, detect, and investigate it, fraud – and the losses it incurs – will persist,” said Erik Skramstad, PwC’s U.S. forensic services practice leader.
The report reveals some characteristics of the average insider threat. “The typical fraudster is between 31 and 40 years old, has been employed between three and five years and has a college degree. The survey found that in the U.S., 40 percent of internal perpetrators are women, as compared to only 19 percent around the world.”
Other highlights of the survey include:
• 45 percent of U.S. respondents reported their organization had suffered fraud in the previous 12 months, compared to 35 percent in 2009
• Cost of frauds over $100,000 has increased substantially, from 44 percent to 54 percent over the two-year period
• 10 percent of those surveyed reported fraud had cost their organization more than $5 million
“The costs associated with economic crime pose a serious threat to an organization’s bottom line,” said Chris Barbee, leader of PwC’s global forensic services practice. “Companies must consider the potential damage to reputation and brand, along with the very real possibility that corrupt activity perpetrated by their employees or by affiliates, third parties, intermediaries, and joint venture partners could trigger stiff penalties.”