Economic Crime Hit 66% Indian Firms in Past 2 Years, Platform Fraud Surged: Report
A recent PwC India report revealed that economic crime has hit 66% of Indian companies in the past two years, with platform fraud on the rise due to the COVID-19 pandemic. The report, titled “The Global Economic Crime and Fraud Survey 2020,” found that despite significant investment in cybersecurity measures, companies in India are still struggling to protect themselves from fraudulent activities.
The report highlighted that a staggering 56% of companies experienced cybercrime-related incidents in the past two years. While the number is lower than the global average of 61%, the report revealed that instances of platform fraud have increased significantly in India. Over 25% of survey respondents reported experiencing such fraud, a jump from 18% in 2018.
One of the primary reasons behind the rise in platform fraud is the wide-scale adoption of digital payments in India. Many businesses have shifted to digital transactions due to the COVID-19 pandemic. These transactions may leave companies vulnerable to platform fraud.
The report also highlighted the importance of protecting digital identity. Around 45% of respondents reported experiencing identity theft, and 42% expressed concerns about the misuse of personal data.
Moreover, the report emphasized the importance of data privacy, stating that 53% of Indian companies experienced data breaches in the past two years. Alarmingly, 34% of respondents were unsure if they experienced data breaches or not.
Overall, the report revealed that economic crime continues to be a significant concern for Indian companies. Companies are facing a wide variety of threats, from cybercrime to data breaches, and need to invest in robust security measures to protect themselves from potential fraudulent activities.
Here are some other key takeaways from the PwC India report:
The impact of economic crime on Indian businesses:
The report found that economic crime significantly affects Indian businesses’ revenue and reputation, with over 54% of respondents reporting monetary losses due to economic crime. Besides, economic crime also impacts the company’s brand, customer trust, and employee morale.
Internal vs. External threats:
The report found that external threats are more prevalent than internal threats. Over 67% of respondents reported external threats, while almost 33% reported internal threats. However, the report emphasized that internal threats can be equally damaging and reiterated the importance of effective internal controls.
The role of technology:
The report highlighted that emerging technologies such as artificial intelligence (AI), automation, and advanced analytics can help companies fight economic crime. However, several companies struggle to leverage these technologies effectively, with only 20% of respondents reporting that they use AI and advanced analytics tools for fraud detection.
The importance of reporting:
The report emphasized the importance of internal and external reporting of economic crime incidents. Only 72% of respondents said that their companies have an incident response plan in place, and just 64% have a whistleblower hotline. The report suggested that companies should set up a robust incident management system and prioritize reporting mechanisms to minimize the damage caused by economic crime incidents.
Economic crime continues to pose a significant threat to Indian businesses. The rise in platform fraud and data breaches highlights the importance of investing in robust security measures and protecting digital identity. To combat economic crime effectively, companies in India need to prioritize internal controls, leverage emerging technologies, and establish strict incident management and reporting mechanisms. By taking these steps, Indian companies can protect themselves from potential fraudulent activities and maintain their reputation and revenue.