EU Nations Unite Against Economic Crime: Perception vs Reality
As the European Union grapples with the growing threat of economic crime, a new report reveals that many companies are struggling to come to terms with the reality of fraud and money laundering. Despite being heavily exposed in these areas, Switzerland - home to two-thirds of the world’s private wealth - is often associated with high-profile cases such as the FIFA corruption scandal.
The Weight of Economic Crime
The weight of economic crime on companies depends on their perception of individual issues, which often lags behind its actual occurrence. Regulated industries, such as financial services and insurance, are better equipped to combat this type of crime due to existing laws requiring more stringent measures.
Crime Evolves with Technology
Internationalization and the rapid development of digital technologies have given a new dimension to economic crime. Cybercrime, in particular, has emerged as a significant threat, with 41% of Swiss companies polled citing it as their greatest concern. However, despite this, only just over half of companies in Switzerland have a cybersecurity program in place - well below the global average.
Putting a Stop to Economic Crime
To combat economic crime, organizations must take a proactive approach. This includes:
- Inspection: Conducting comprehensive risk assessments to identify vulnerabilities and allocate resources accordingly.
- Prevention: Implementing modern controls and protective measures to reduce vulnerability to fraud. A sustainable code of ethics can also help communicate a basic understanding of honesty and transparency to staff.
- Detection: Utilizing new technologies, such as artificial intelligence (AI), to uncover infractions and abusive practices.
- Sanctions: Reporting internal offenses to the authorities and penalizing misdemeanors unconditionally to demonstrate a commitment to ethical conduct.
A Question of Culture
Establishing a corporate culture where it’s okay to talk about mistakes and suspicions is crucial in preventing economic crime. Without openness, mistakes will be swept under the carpet, irregularities kept quiet, and wrongdoings ignored.
The attitude to economic crime poses fundamental ethical questions for international companies: how much control is appropriate and how much autonomy is necessary? The report concludes that there’s no such thing as a petty case of fraud - every detected instance must be taken seriously to prevent larger-scale offenses from emerging.