Financial Crime World

Title: White-collar Crimes Thrive in Germany’s Corporate Sector: Impacts, Risks, and Preventive Measures

German Companies Face Growing White-collar Crime Wave

According to the latest study on “White-collar crime in Germany” 2023, white-collar crimes continue to pose a significant threat to German businesses. With increasing incidents of financial misdeeds, it’s essential for organizations to remain attentive and proactive.

  • Percentage of Companies Affected: Fifty-three percentage of companies surveyed have witnessed the impact of white-collar crimes (Bundesverband der Deutschen Industrie; BDI, 2023).
  • Incident Rates: Larger companies reported a higher incident rate (45%) than smaller ones (30%).
  • Perceived vs. Actual Risks: A concerning disconnect exists between perceived risks and actual incidents. 69% of respondents assess the risk within their own organizations as moderate, while 78% view it as high or very high for other companies.

High-Value Damage from White-collar Crime

The study reveals the following about the damage caused by white-collar crimes:

  • Most Common White-collar Crimes: Most white-collar crimes involve fraud, breach of trust (36%), or theft and embezzlement (39%).
  • Classification of Risks: Only 35% of the companies classified these incidents as high or very high risks. The majority (56%) considered them medium risks.
  • Financial Impact: Fifteen percent of companies reported losing over €1 million due to white-collar crimes, an increase from 10% in 2020.
  • Quantifying Losses: Twenty-six percent of the companies admitted they had no idea of the overall financial impact.

Data Protection and Security as Top Priorities

As white-collar risks escalate, companies are putting more emphasis on safeguarding data and information.

  • Perceived Threats: Data theft (87%), misuse (79%), manipulation (74%), and breaches (78%) are perceived as significant threats.
  • Risks and Damages: The damages associated with cybercrime can reach millions due to reputational harm, fines, and costly repercussions.
  • Impact of White-collar Crime: Companies increasingly struggle to quantify losses from white-collar crimes.

Preventive Measures: Combating White-collar Crimes

To combat white-collar crimes, companies are adopting the following measures:

  • Defining Principles of Conduct and Guidelines: 79% of companies define principles of conduct and guidelines.
  • Systematically Collecting and Assessing Crucial Data: 76% of companies collect and assess crucial data.
  • Policy Formulation and Implementation: Policy formulation and implementation is essential (70%).
  • Optimized Processes and Controls: Optimized processes and controls are crucial (56%).

The Impact of Supply Chain Due Diligence Act

The recently enacted Supply Chain Due Diligence Act (LkSG) demands that companies take rigorous actions to prevent environmental and human rights violations within their supply chains.

  • Compliance Measures: Compliance measures involve monitoring, recording, and updating prevention and educational processes.
  • LkSG Regulations: Forty-six percent of surveyed companies are unfamiliar with LkSG regulations.
  • Impact on Business: Over 70% of companies anticipate its impact on their business.
  • Concerns: Large companies are mostly concerned about potential reputational harm, while small companies are primarily worried about the need to adapt preventive measures.

To explore white-collar crime related topics in greater detail, download the study “White-collar crime in Germany.”