Fraud in Switzerland is typically committed by perpetrators who are male, between 46 and 55 years old and members of senior management. Their criminal activities are being enabled by technology with increasing frequency: As revealed by KPMG’s latest international Forensics study, 24% of 750 cases of fraud in 78 countries were significantly facilitated by technology.
White-collar crime causes billions of dollars in losses every year all around the globe. Criminal activities of this nature are taking their toll on numerous companies in Switzerland, too. Yet what does a typical fraudster look like? KPMG took a closer look at this question within the scope of an international study. In Switzerland, the profile looked like this:
• Over half of the fraudsters investigated are between 46 and 55 years of age.
• 82% of the perpetrators are male.
• 64% of all fraudsters come from within the company’s own ranks, i.e. they are employed by the victim organization (61% in 2013).
• 55% of the perpetrators are members of senior management.
• 36% have been employed by the company for at least six years (2013: 41%).
• One out of every five fraudsters (18%) is described as having an autocratic personality.
• On the other hand, white-collar offenders are three times as likely to be perceived as friendly rather than unfriendly.
• The overriding motives for fraudsters’ activities are personal financial gain to finance their lifestyle (64%), greed (18%) and a sense that the crime could be easily committed (18%).
• Fraudulent acts are committed by groups (62%) more frequently than by individuals (38%); these figures were 70% and 30%, respectively, in 2013.
• Male and female perpetrators colluded in a large number of cases involving fraudsters operating in groups (46%).
• In 61% of the cases, an external third party was involved in the crime.
• 44% of fraudulent acts were detected as a result of tips or complaints and 22% as a result of a management review.
The potential for misuse is rising hand in hand with technological advances: While perpetrators are already employing extremely effective technological tools, businesses are doing very little in terms of using technology to curb criminal activities. Philippe Fleury, Head of Forensic at KPMG Switzerland, warns: “Given that the use of technology in white-collar crime will continue to rise, employing threat-monitoring systems and data analytics to detect anomalous or suspicious behavior at an early stage is a must for organizations in today’s world.”
Both in Switzerland and around the globe, technically adept fraudsters are using technology in many different ways to enable their activities. Of all of the cases of technology-enabled fraud investigated in Switzerland, around 27% of these concerned false or misleading information in accounting records and 27% related to fraudulent e-mails. Another 9% involved the abuse of existing access rights to computer systems.
For 64% of all fraudsters, weak internal controls are a key factor that is gaining importance: The number of fraudsters whose criminal activities are greatly facilitated by weak controls rose sharply to 27%, up from 18% in 2013.
Yet even the best controls cannot provide 100% protection against fraud: The control systems were circumvented in 16% of the cases investigated. In another 20% of the cases, they played no role at all; the perpetrators were not concerned about the control mechanisms in place and simply disregarded these as they defrauded the company.
KPMG conducted a global survey of details about fraudsters who were investigated between March 2013 and August 2015. The report analyzed a total of 750 fraudsters involved in fraud cases in 78 countries. The study looked at cases of white-collar crime for which the fraudsters and details about the frauds committed were known. This is a follow-up report on a similar KPMG study from 2013.
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