Financial Crime World

Title: Economic Crime Soars in Switzerland: KPMG Report Reveals Alarming Increase

Subtitle

  • The average cost of each economic crime incident doubled last year
  • Large fraud cases on the rise

KPMG’s latest report on economic crime and fraud trends in Switzerland reveals a significant increase in financial wrongdoings. The key findings indicate a worrying escalation in the frequency and cost of economic crimes.

Key Findings

  • Increased costs: The average cost of each economic crime incident more than doubled from CHF3.3 million in 2018 to CHF7.7 million in 2019.
  • Growing large-scale fraud: Number of fraud cases exceeding CHF10 million grew from four in 2018 to nine in 2019. A 30% increase was observed in instances of economic crime involving sums below CHF10 million.

Sectors Most Affected

The research, based on 451 Swiss businesses across various industries, found four sectors that are particularly susceptible to economic crime:

  1. Financial services
  2. Healthcare
  3. Education
  4. Public institutions

Reasons for Fraud Cases

The primary reasons for identified fraud cases include:

  1. Inadequate controls over procurement procedures
  2. Weaknesses in financial reporting

Digital Transactions and Cybersecurity Risks

With the increasing use of digital channels for financial transactions, businesses face additional risks. Cybercriminals are exploiting vulnerabilities in these systems, emphasizing the importance of robust cybersecurity.

Government and Regulatory Efforts

Despite stricter anti-money laundering measures and more robust regulations in the financial sector from the Swiss government and FINMA, the data signals a growing challenge requiring further attention and action.

Impact on Businesses and Public Trust

Economic crime is not only damaging to businesses but also negatively impacts public trust and confidence. Addressing these challenges necessitates a coordinated response from lawmakers, regulators, and businesses to mitigate risks and drive down the numbers of costly and detrimental incidents.