More than one in three organisations (36%) experienced economic crime in the last two years, with cybercrime affecting almost a third (32%), the highest ever level in PwC’s biennial survey of Global Economic Crime.

The PwC Global Economic Crime Survey 2016 interviewed more than 6,000 participants in 115 countries. Worryingly, the report finds that business detection and response plans are not keeping pace with the level and range of threats now facing organisations, with a potential trend in fraud detection of too much being left to chance. It warns that a ‘passive approach to detecting and preventing economic crime is a recipe for disaster’.

Although there is no regional analysis of results specifically for the Isle of Man, Alison Cregeen, Forensics Senior Manager with PwC Isle of Man, commented:

‘It would be naive to think that we are insulated here from what is happening elsewhere in the world. Fraud remains a very real problem on the Isle of Man as it is elsewhere, and cybercrime is certainly affecting more local companies. In the last 12 months we have seen a marked increase in the number, level of sophistication and success rate of cyber attacks. We have found that many companies do not adequately understand the evolving risks they face or do not have an appropriate fraud/cyber incident response plan in place.’

The main findings of the survey include:

• Overall rates: The overall rate of global economic crime reported has fallen for the first year since the financial crisis, but only marginally – to 36% from 37% in 2014. Regionally, rates rose in Western Europe (40% vs 35%), with the UK and France in particular showing significantly higher rates (UK 55% vs 44%, France 68% vs 55%)
• Cybercrime: Incidents reported were up 8% to 32% and over half (53%) of respondents perceived an increased risk of cyber threats over the last 24 months. 34% believe it is likely that their organisations will experience cybercrime in the next 24 months
• Response to cybercrime: Only 37% of respondents reported having a fully operational incident response plan in place. Almost a third have no plan at all, with 14% of respondents not even intending to implement one. 45% of respondents do not believe that their local law enforcement agencies have the required skills and resources to combat cybercrime
• The fraudster profile: Nearly half the serious incidents of economic crimes were carried out by perpetrators employed by the affected organisation. Internal fraudsters are most likely to be male graduates, with three to five years of service, aged between 31 and 40 years old, and serving a middle/senior management function
• Drivers of crime: Seven out of ten organisations believe that opportunity is the main driver of economic crime committed by internal parties
• What’s next? 20% of respondents believe their organisations are likely to experience the leading economic crimes - asset misappropriation, cybercrime or bribery and corruption - within 24 months. Within two years, organisations in six of the G20 (UK, USA, Italy, France, Canada and Australia) expect cybercrime to be the largest economic crime threat they face

Data quality, skills, resources, and board level engagement, were amongst the recurring issues respondents cited, which combined are leaving many organisations’ detection and control programmes unable to adequately protect them.

Steve Billinghurst, Advisory Director with PwC Isle of Man, added:

‘The economic crime environment is becoming increasingly complex, driven by cyber threats and an ever more interconnected business world. As an international business centre, the Isle of Man is often at the heart of this interconnected world and as such, businesses here are at risk to the effects of economic crime. The speed at which criminals can adapt and change is a significant challenge which companies struggle to keep pace with. Action against economic crime has to be embedded within the whole organisation's culture and day-to-day decision making if it is to succeed in addressing this issue.’

For more information or to see the full survey findings please visit PwC Isle of Man's website - www.pwc.com/im/gecs