The UK is a “procurement fraud capital” with detection capabilities lagging behind other countries and firms losing comparatively more money, according to a report.
The report, by research and analytics firm SAS, said the UK was “more reliant on ineffective manual detection techniques” than other nations and “losses are particularly high”.
The report, based on a survey of 850 business leaders across EMEA, found 40% of UK companies lost between €150,000 and over €400,000 a year, compared to an EMEA average of 16%.
However, SAS said there may be a greater awareness of the damage caused by procurement fraud in the UK and this could explain the higher reported losses.
The survey found 31% of UK businesses had been subject to contract bid rigging and 43% to duplicate invoices, compared to EMEA averages of 25% and 27% respectively.
A quarter (24%) of UK firms had experienced collusion between suppliers and 21% had caught employees collaborating with vendors they had a stake in, the survey found, compared to EMEA averages of 16%.
More than a fifth (23%) of EMEA businesses had no assigned personnel responsible for procurement fraud or were unable to say who has ownership for it.
Most organisations failed to hold more than one internal audit and supplier check a year and 22% admitted to not auditing for procurement fraud at all.
Most companies depended on manual controls and basic detection software to protect themselves, while only 14% and 9% use advanced analytics or artificial intelligence (AI) respectively.
“To turn the corner, they will need to embrace data and analytics-driven detection technologies that enable them to continuously monitor compliance,” said the report.
The report said that many countries believed they lacked the skills and resources to use analytics and AI techniques. In the UK the skills shortage around advanced analytics was higher than in any other country, with 37% of businesses struggling to find the right talent.
Laurent Colombant, continuous compliance and fraud manager at SAS, said: “There is one positive to take from the UK figures appearing so high – it shows that businesses acknowledge the danger and are aware it is happening around them.
“Yet honesty is only the first step, and the UK compares poorly to other countries in its reluctance to invest in the latest detection technologies. Until British businesses take a hard look at their detection capabilities and modernise their processes, they will continue to fall behind.”
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