Fraud, cyber, and security risks are at an all-time high with India witnessing a significant increase in fraud cases in the last five years, according to a research report. The study states that 89 per cent of executives have reported that their companies were victim to at least one instance of fraud over the past one year, up from 68 per cent in 2016.
As per the 2017/18 Kroll Annual Global Fraud & Risk Report, levels of reported fraud have steadily risen every year since 2012, when the reported occurrence was just 61 per cent.
The report pointed out India has also witnessed the highest incidence of fraud globally across three categories – Theft of physical asset or stock (40 per cent), IP theft, piracy or counterfeiting (36 per cent) and Corruption and bribery (31 per cent).
“An even greater percentage of executives surveyed (86 per cent) said their companies had experienced a cyber-incident or information theft, loss, or attack over the past 12 months, slightly up from 85 per cent in 2016. Seven in 10 respondents (70 per cent) reported the occurrence of at least one security incident during the past year, compared to 68 per cent in the previous survey,” stated the report. It also claimed that North America and Europe were the most affected with 92 per cent of respondents affected by fraud, up from 83 per cent in 2016.
As many as 33 per cent of respondents in the country suggested that the extent of loss suffered by their company due to fraud was more than 7 per cent of the revenues. This is significantly higher than 23 per cent of respondents witnessed globally. Mexico was the only country where a larger proportion of respondents suffered loss of over 7 per cent of revenues due to fraud (39 per cent respondents), the report stated.
Reshmi Khurana, Managing Director and Head of South Asia for Kroll, said; “In India, the percentage of respondents affected by fraud increased significantly by 21 per cent in 2017 to 89 per cent while the global average this year is 84 per cent. However, when all participants of the survey were asked whether they had been dissuaded from operating in a particular jurisdiction, India’s position improved in 2017, with only 9 per cent of respondents (vs 19 per cent in 2016) claimed that they were being dissuaded from operating in the country. This suggests that while the risk of fraud remains high, India has improved its position as a preferred investment destination. Investing is an art and investors must manage and ride the associated risks.”
Tarun Bhatia, Managing Director, Kroll South Asia, however said that the silver lining for India is that while higher proportion of companies witnessed fraud during 2017, increasing number of companies are also becoming aware of risks related to fraud and are taking preventive measures to tackle the issue.