PwC’s Global Economic Crime and Fraud Survey 2022 highlights cybercrime as the biggest threat.

Almost half of nearly 1,300 business leaders reported their organisations had experienced fraud or financial crime over the past two years.

And 70 per cent of the sample experienced new incidents of fraud as a result of Covid-19 disruptions.

The report said that emerging risks from ESG-reporting fraud and platform fraud could impact businesses in the future.

Media, telecommunications and tech industries were the hardest hit by fraud according to PwC’s Global Economic Crime and Fraud Survey 2022 which exposed organisational vulnerabilities, while increased and more sophisticated attacks were making external fraudsters a greater threat.

The survey of 1,296 business leaders from across 53 countries found that cybercrime, customer fraud and asset misappropriation were the most common crimes experienced by organisations, regardless of revenue.

Small, medium, and large businesses now face the biggest threat from cybercrime after the impact of hackers grew substantially over the past two years.

The rise of digital platforms, such as social media, e-commerce or services (rideshare, lodging etc) opens the door to myriad financial crime risks, and 40 per cent of those encountering fraud experienced some form of platform fraud.

Chris Mills, director, PwC Bermuda, said: “Defending against new external threats requires a different set of tools and a continuous focus on policies, training, controls and, increasingly, the use of sophisticated technology.

“Internal audit has a vital role to play in assisting organisations to understand and manage cybersecurity risks.

IA should play a key role in evaluating the comprehensiveness of cyber-risk assessments.”

Bruce Scott, cyber leader for PwC in the Caribbean, said: “Businesses are seeing an increase in threats from outside the organisation with perpetrators quickly growing in strength and effectiveness.

“Defence against these external threats requires new thinking. Organisations need to be more agile than ever to respond to these converging threats, and adopt new approaches and technologies to predict and prevent fraud.”

In this year’s survey results, cybercrime came in ahead of customer fraud, the most common crime in 2020, by a substantial margin.

And 42 per cent of large businesses reported experiencing cybercrime in the period, while only 34 per cent experienced customer fraud.

While just under half of organisations reported experiencing fraud or economic crime within the past two years, the impact of these crimes have been more substantial.

Among companies with global annual revenues over $10 billion, 52 per cent experienced fraud during the past 24 months.

Within that group, nearly one in five reported that their most disruptive incident had a financial impact of more than $50 million.

The share of smaller companies (those with less than $100 million in revenues) affected was lower; 38 per cent experienced fraud, of which one in four faced a total impact of more than $1 million.

The growing maturity of the technology, media and telecommunications sector helped it identify a significant increase in fraud activity since 2020 with nearly two-thirds of companies experiencing some form of fraud, the highest incidence of all industries.

Emerging risks, including ESG reporting fraud (the act of altering ESG disclosures so that they do not truly reflect the activities or progress of an organisation) and supply chain fraud, have the potential to cause greater disruption in the next few years.

For example, only eight per cent of organisations encountering fraud in the past 24 months experienced environmental, societal and governance reporting fraud.

Yet, as ESG continues to increase in importance to stakeholders, the incentive to commit fraud in this area may grow.

Similarly, one in eight organisations experienced new incidents of supply chain fraud as a result of the disruption caused by Covid-19, and one in five sees supply chain fraud as an area of increased risk as a result of the pandemic.