This year’s results look very strange at first. We are seeing a higher number of fraud cases, but we are also seeing a decrease in the amounts lost. This may partly be explained by the fact that previous years saw a few extremely big cases that skewed the results. An alternative and equally plausible reason is that companies have stepped up their anti-fraud and compliance measures. This has enabled them to detect more cases, which explains the increase in the number of cases. They are also doing this earlier, which explains why the amounts lost are getting smaller.
There are basically three main perpetrators: professional criminals, fraudulent managers and employees. Professional criminals are more focused on playing on the trust of individuals and investors. Managers and employees who commit fraud tend to spot an opportunity or they are driven by financial problems.
Actually, all industries are affected. But the data seems to indicate a shift towards private individuals and not-for-profit organizations. This seems to indicate that a professional corporate environment makes it harder for fraudsters to strike.
Our data seems to indicate that anti-fraud measures and compliance measures have an effect on the prevention and earlier detection of fraud. Other research tends to back this up too. The saying “prevention is better than cure” is applicable here. We know for certain that setting up prevention measures is usually much, much cheaper than the average fraud case!
Ten years ago hardly any company in Switzerland had a whistle-blowing hotline. Today many companies have implemented certain prevention structures, such as hotlines, a code of conduct or improved compliance measure, in order to avoid fraud or at least discover it sooner. And detection time is crucial, because the longer a fraudster goes undetected, the worse the damage will be for the company.
The number of major cases of white-collar crime has increased year on year to 91, a record since KPMG started gathering data systematically in 2008.
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