Financial Crime World

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Fraud Risk Looms Large: Organizations Must Act to Mitigate Threat

A recent survey by PwC has highlighted the growing threat of economic crime and fraud, with nearly three-quarters of organizations experiencing an enhanced tone at the top and control environment in addressing these issues. However, despite these efforts, 33% of organizations have suffered damaged brand trust and reputation, while 34% have seen a decrease in revenues and profitability.

The Impact of Proactive Measures

The survey found that organizations that had taken proactive measures to address fraud risks were more likely to experience improved financial performance, with:

  • 28% seeing a reduction in losses
  • 9% reporting improvements in revenue and profitability

Conversely, those that failed to take action were more likely to suffer negative consequences, including:

  • Increased losses
  • Decreased employee morale

The Importance of Awareness and Preparedness

PwC’s experts emphasize the importance of awareness and preparedness in combating economic crimes. “Identifying the risks, keeping up with technology and regulatory advancements arms you with the requisite knowledge to devise controls and initiatives to mitigate the risks,” said Muniu Thoithi, Advisory & Forensics Leader for Eastern Africa at PwC.

Periodic Assessment and Refinement

The survey also highlighted the importance of periodic assessment and refinement of fraud fighting systems. “From our global survey, we note that business models frequently evolve before risk programs are established, leaving companies exposed to unexpected risks,” said Thoithi.

Mitigating Risks

To mitigate these risks, organizations should consider investing in:

  • Proactive monitoring processes
  • Whistleblowing hotlines
  • Training and third-party management programs

PwC’s experts can help organizations assess their fraud risk and develop effective mitigation strategies.

About PwC

PwC is a network of firms in 158 countries with more than 236,000 people who are committed to delivering quality assurance, advisory, and tax services. Our purpose is to build trust in society and solve important problems.