South African organisations have reported the highest rate of economic crime in the world over the last two years, according to a new Global Economic Crime Survey by financial services company, PwC.<\/p>\n
PwC said that 69% of organisations surveyed report being victims of economic crime, unchanged from 2014, while 32% of organisations have experienced cyber crime.<\/p>\n
South African organisations reported a considerably higher frequency in the incidence of economic crime in comparison to their African and global peers.<\/p>\n
\u201cWhen compared to the global statistic of 36%, we are faced with the stark reality that economic crime is at a pandemic level in South Africa. No sector or region is immune from economic crime,” said Louis Strydom, Forensic Services Leader for PwC Africa.<\/p>\n
South Africa was ahead of France (68%), Zambia (61%), Kenya (61%), UK (55%), Spain (55%), and Australia (52%) in the biennial list.<\/p>\n
\u201cThe fact that developed countries are included in the list of the top ten countries reporting the highest rates of economic crime brings home a clear message \u2013 economic crime is a global issue and one that affects developed markets as much as it does emerging ones,\u201d said Strydom.<\/p>\n
South Africans also exhibited significantly low levels of confidence in local law enforcement agencies, with 70% of organisations believing agencies are inadequately resourced and trained to investigate and fight economic crime.<\/p>\n
This is almost twice the global rate of 44%.<\/p>\n
PwC interviewed 6,337 participants in 115 countries, with 232 organisations interviewed locally, from a broad spectrum of industries.<\/p>\n
The survey found that asset misappropriation remains the most prevalent form of economic crime reported by 68% of respondents. It is followed by procurement fraud (41%), and bribery and corruption (37%).<\/p>\n
Cybercrime has risen to the fourth most reported type of economic crime in South Africa, with 32% of organisations affected – on par with the global average.<\/p>\n
Cost of economic crime<\/strong><\/p>\n Economic crime is costing businesses billions of dollars. While more than half of the global organisations surveyed reported having lost less than $100,000 to economic crime over the last 24 months, only 43% of South African organisations could make that claim.<\/p>\n Almost a fifth of local respondents experienced losses of between $100,000 (R1.6 million) and $1 million (R15.7 million), and one in four respondents indicated having suffered losses of more than $1 million.<\/p>\n The fraudster profile<\/strong><\/p>\n For the first time since 2009, external actors exceeded internal actors as the dominant profile of fraudsters acting against an organisation (46% external versus 45% internal).<\/p>\n South African organisations were reported to be more than twice as likely to be defrauded by vendors compared to the rest of the world.<\/p>\n Reports of senior management perpetrating economic crimes against the organisations they work for more than halved from the previous survey (from 41% to 15%), while middle management appear to have taken centre stage, with 39% of fraud being perpetrated by internal actors emerging from this band.<\/p>\n Cybercrime<\/strong><\/p>\n Incidents reported were up 23%when compared to the previous survey conducted in 2014.<\/p>\n More than half of organisations (57%) believe it is likely that their organisations will experience cybercrime in the next 24 months.<\/p>\n Most companies are still not adequately prepared for, or even understand the risks faced, with only 35% of organisations reporting they have a fully operational cyber incident response plan in place.<\/p>\n It is concerning to note that should a cyber crisis arise, only 34% of organisations have personnel that are \u2018fully trained\u2019 to act as first responders, and 20% of companies indicated that they will make use of outsourced personnel, PwC said.<\/p>\n Corruption is ruining South Africa\u2019s democracy<\/a><\/strong><\/p>\n The biggest corruption problems in the world \u2013 and where they happen most<\/a><\/strong><\/p>\nMore on corruption<\/h3>\n