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Managing Fraud - An Increasingly Complex Threat

Posted by Serina Gill on 06-Jul-2018 10:37:26

background-bank-notes-bills-929285-353056-editedThe research report conducted and written by Huntswood 'Fraud: How To Manage This Increasingly Complex Threat',  highlights the need for proactive risk management and effective processes to deal with fraud.

It brings to light how and why some of the most prevalent forms of fraud are linked to technology applications and access. 

As firms progress with their digital offering and communications, this is a problem that could become more prevalent. 

The research conducted by Huntswood involved interviews with 43 firms across financial services and utilities.   It incorporated qualitative and quantitative research and analysis of in-depth interviews with senior operational, compliance/risk and financial crime management on their fraud risk management practices. Hunstwood also engaged with board members and NEDs to understand their views on fraud risk management.

Key results from the research include:

  • 33% of the participating firms estimated that the cost of fraud was greater than £500, 00 in the previous 12-month period. With 41% of all participating firms stating they experienced over 250 fraud events in the same period.
  • Identity frauds were the most frequently identified individual risk types, followed by insider frauds and cyber-enable frauds.
  • 100% of banks and building societies stated that fraud is an explicit agenda item at board meetings.
  • Proactive data monitoring and analysis are among the most effective anti-fraud controls. Firms which undertake proactive data analysis techniques experience frauds that are 54% less costly and 50% shorter than organisations that do not monitor and analyse data for signs of fraud.
  • 42% of firms stated they possess a single view of the customer with others citing it as a desired state.

A full copy of the research paper can be downloaded here

"Fraud is ever changing and this research highlights that firms are finding it challenging to effectively manage the seven core risks identified. Each sector prioritised fraud risks differently, with no one risk recognised as the core concern" - Huntswood