Financial Crime World

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Emerging Risks in Financial Crime Prevention in Thailand

A Growing Concern for Thai Businesses

BANGKOK, June 30, 2022 - A recent survey by PwC Thailand has revealed that Thai businesses are lagging behind in terms of investment in enterprise risk management and compliance. This leaves them vulnerable to emerging threats such as Environmental, Social and Governance (ESG) reporting fraud, supply chain fraud, and anti-embargo fraud.

Key Findings from the Survey

  • Almost half of global businesses reported incidents of fraud or economic crime over the past two years.
  • Only 22% of Thai businesses detected fraud despite being vulnerable to cybercrime risks.
  • The top three fraud risks identified by the survey are:
    • Cybercrime (24%)
    • Procurement fraud
    • Asset misappropriation

Emerging Threats in Financial Crime Prevention

Environmental, Social and Governance (ESG) Reporting Fraud

  • Thai corporations are almost on par with the global figure for having processes in place to identify and manage environmental reporting risk.
  • The incentive to commit fraud in this area is only going to increase.

Supply Chain Fraud

  • The pandemic has led to supply chain shortages, forcing some companies to reallocate human resources from fraud control to supporting supply chain issues.
  • This can result in procurement fraud, particularly if new suppliers are brought in without proper due diligence.

Recommendations for Strengthening Fraud Risk Management

To prevent production disruptions and strengthen their fraud risk management, businesses should consider the following:

  • Understand the end-to-end lifecycle of customer-facing products
  • Strike the proper balance between user experience and fraud controls
  • Orchestrate data to track end-to-end lifecycle of users and generate meaningful alerts

Conclusion

Preventing fraud and economic crimes is a complex challenge that requires continuous effort on governance, people, processes, and technology. It takes a sophisticated approach to protect vulnerable perimeters from bad actors who are becoming competent in exploiting the cracks.

“We urge Thai businesses to take proactive steps to strengthen their fraud risk management and invest in technologies that can help detect and prevent emerging threats,” said Phansak Sethsathira, Risk Consulting Partner at PwC Thailand.