Vietnamese Companies Lag Behind in Fraud Prevention Measures

As Vietnam’s economy continues to grow, companies are focusing on sales growth and often overlooking internal control measures, making them vulnerable to fraud. According to a recent survey by PwC, only 46% of Vietnamese organizations have performed regular fraud risk assessments, with fewer focusing on specific areas such as anti-bribery and corruption.

Money Laundering Concerns

Vietnam’s largely cash-based economy makes it a prime target for money laundering criminals. However, the survey found that:

• 86% of respondents are aware of Anti-Money Laundering (AML) regulations
• 75% conduct AML assessments, higher than the global and Asia-Pacific levels

Cybercrime On the Rise

The survey also highlighted the growing threat of cybercrime in Vietnam, with nearly half of respondents reporting they had been targeted by cybercrimes in the past two years. Only one-third were willing to share information about potential cyber-attacks with government/law enforcement agencies.

Technology Lags Behind Global Practices

PwC’s survey found that Vietnamese organizations lag behind the rest of the world in using technology to detect and monitor economic crime. While:

• 64% believe a formal business ethics and compliance program is an urgent need
• This lags behind the Asia-Pacific region by 10% and globally by 13%

Call for Action

Grant Dennis, CEO of PwC Consulting Vietnam, emphasized that Vietnamese organizations must recognize the importance of adopting anti-fraud measures to prevent and combat fraud. “As often occurs in rapidly developing economies, anti-fraud measures may not develop at the same pace as the economy,” he said.

The survey concludes that Vietnamese companies would benefit from adopting a formal Ethics and Compliance program, which is likely to be an expectation not just of regulatory bodies but also of foreign business partners and investors.