Croatia’s Finance Industry Hit by Widespread Fraud, Survey Reveals

Staggering Increase in Fraudulent Activities

A recent survey conducted by PricewaterhouseCoopers (PwC) has revealed that 53% of Croatian companies were victims of fraud and economic crime in 2018, a significant 26% increase compared to 2016. This alarming figure highlights the widespread fraudulent activities plaguing Croatia’s financial sector.

Global Comparison

Globally, 49% of businesses experienced economic crime in the last two years. However, Croatia’s figures are particularly concerning, with 62 businesses participating in the survey reporting a significant rise in fraudulent activities.

Cybercrime on the Rise

Cybercrime is emerging as a major concern for Croatian companies, with every third business affected (33%), a 25% increase compared to two years ago. Malicious software and online identity theft were identified as the most prevalent cybercrimes, affecting 35% and 27% of businesses respectively.

Disruption and Consequences

The survey revealed that nearly half of those surveyed in Croatia (47%) said that cyberattacks have seriously disrupted or shut down their business processes. A significant number of companies (32%) expect to experience cyber attacks and believe they would be the type of crime to cause the largest disruptions with negative consequences.

Lack of Cybersecurity Measures

Shockingly, 23% of businesses admitted they do not have, or are not acquainted with, any cybersecurity programs intended to prevent and reveal this type of crime in their organizations. However, a majority (53%) of those surveyed said they would share information on their suspicions or experiences with cyberattacks with the relevant authorities.

Financial Losses

The survey also highlighted that over half of Croatian companies who were victims of online fraud in 2016 and 2018 suffered financial losses between 320,000 and 6.4 million kuna. A significant 9% reported losses greater than 6.4 million kuna, which were not recorded in 2016.

Increased Funding for Fraud Prevention

In response to the rising fraudulent activities, a significant number of Croatian companies (nearly one-third) have increased funds for fighting economic crime in the last two years and plan to continue doing so over the next two years.

Sophisticated Tools for Revealing Fraud

The survey also showed that Croatian businesses are increasingly using more sophisticated tools for revealing and tracking fraud, compared to traditional methods such as corporate security and routine internal revisions. A significant 50% of reported cases of fraud were revealed through the use of advanced tools like fraud risk management, data analysis, and tracking of suspicious activities.

Perpetrators of Fraud

Ivana Rapic, forensic manager in PwC Croatia, noted that Croatian companies’ experiences differ from those on a global level regarding typical perpetrators of fraud. “On the global level, internal perpetrators are the majority (52 percent), while those surveyed in Croatia reported more external perpetrators (50 percent) and a significant number of these were customers (70 percent),” she said.

Lack of Risk Assessment

The survey also revealed that a substantial 48% of Croatian companies have never conducted a general risk assessment, which is almost identical to the percentage of businesses claiming they have not experienced or are unaware of fraud (47%).

Urgent Action Needed

In light of these findings, it becomes clear that Croatia’s finance industry requires urgent attention and action to combat fraudulent activities. The country must take concrete steps to strengthen its regulatory framework, improve cybersecurity measures, and enhance transparency and accountability in business transactions.