The PwC Global Economic Crime Survey 2016 has found the overall rate of economic crime reported has fallen for the first year since the financial crisis, albeit marginally.
The survey, Adjusting the lens on economic crime, found that 36% of organisations surveyed experiencing economic crime in the past two years, down from from 37% in the previous survey in 2014. PwC interviewed more than 6,000 participants in 115 countries for the survey.
However, 57% of respondents in Africa reported economic crime, up from 50%. Three countries stood out in this respect: South Africa, where 69% of respondents reported economic crime, unchanged since 2014, followed by Kenya (61%, up 17% from 2014) and Zambia (61%, up 35% from 2014), according to the report.
However, while the survey found that overall, organisations’ fear of cyber crime has reached its highest level in six years, with incidents up 8% to 32%, it was not one of the top three types of economic crimes experienced in Africa, Asia Pacific and Eastern Europe, which a have higher than global average amount of bribery and corruption and procurement fraud.
Overall, the most common economic crimes were asset misappropriation (64%), cyber crime (32%), and bribery and corruption (24%).
The main perpetrators of fraud in Africa were internal, 7% higher than the global average, while Kenya and South Africa were the countries where the most respondents felt that law enforcement agencies were not adequately resourced to tackle economic crime (79% and 70% respectively), compared with an overall figure of 44%.
While 91% of African respondents reported there was an organisational code of conduct, the highest number of any region, 62% said the code was not supported by regular training and communications, the biggest discrepancy of all regions.
Some 48% of respondents in Africa said thought they were likely to suffer bribery and corruption in the next 24 months, while 59% said they were planning an increase in their compliance spend over the next 24 months.
Overall, the report said despite the marginal drop in economic crime, the financial cost of each fraud was increasing, with 14% of respondents experiencing losses of more than $1m (£0.7m) in the past two years.
North America (37% vs 41%), Eastern Europe (33% vs 39%), Asia Pacific (30% vs 32%) and Latin America (28% vs 35%) had the lowest rates of reported economic crime.
As well as rising in Africa, reported economic crime also increased in Western Europe (40% versus 35%) and the Middle East (25% versus 21%).
On a country level, the highest increases were 68% in France and 55% in the UK, both up 25% in the past two years, while 61% of Zambian respondents reported economic crime, up 31% on 2014.
Financial Services organisations reported the most economic crimes over the two-year period, followed by government and state-owned enterprises, and retail and consumer industries.
The survey found that 37% of respondents reported having a fully operational incident response plan in place, with almost a third having no plan at all and 14% not intending to implement one.
More than a quarter of financial services firms have not conducted risk assessments for anti-money laundering or the combatting of the financing of terrorism.
A fifth of respondents believe their organisations are likely to experience asset misappropriation, cybercrime or bribery and corruption in the next 24 months.
PWC concluded that business detection and response plans are not keeping pace with the level and range of threats and warned that “a passive approach to detecting and preventing economic crime is a recipe for disaster”.
Andrew Gordon, global leader, forensic services, PwC, said that the modest drop in overall reported economic crime masked an increasingly complex economic crime environment.
“Too few companies are adapting their risk assessments and control frameworks fast enough,” he said. “Action on economic crime is not the responsibility of one person or team, it must be embedded within an organisation’s culture.”