India witnessed a significant increase in fraud cases involving corporates with 89% of executives reporting that their companies fell victim to at least one instance of fraud in the past 12 months, up from 68% in 2016, according to Kroll Annual Global Fraud & Risk Report 2017-18.
As per this report India witnessed the highest incidence of fraud globally across three categories: theft of physical asset or stock (40%), IP theft, piracy or counterfeiting (36%) and corruption and bribery (31%).
The findings revealed that most common perpetrators of fraud incidents in India in the past 12 months were joint venture partners with 45% respondents naming them as the primary perpetrators.
Last year existing and former employees were the main perpetrators of fraud within a company. This year, junior employees were the second most common perpetrators causing fraud incidents (43% respondents), as per the report.
“In India, the percentage of respondents affected by fraud increased significantly by 21% in 2017 to 89% while the global average this year is 84%,” Reshmi Khurana, Managing Director and Head South Asia, Kroll said.
As much as 33% of respondents in India suggested that the extent of loss suffered by their company due to fraud was more than 7% of the revenues.
This is significantly higher than 23% of respondents witnessed globally. Mexico was the only country where a larger proportion of respondents suffered loss of over 7% of revenues due to fraud (39% respondents).
Cyber security remained an area of concern with 84% of Indian respondents saying they had experienced a cyber-attack in the past 12 months, indicating an 11% point increase from 2016 (73%).
The Kroll Report reveals that respondents are experiencing a heightened sense of vulnerability to fraud, cyber, and security risks, with information-related risks now being the area of greatest concern.
49% of respondents in India felt they were most vulnerable to information theft, loss or attack such as data theft. This is similar to the global view with highest proportion of respondents feeling most vulnerable to information theft, loss or attack (24%).
Tarun Bhatia, Managing Director, Kroll South Asia said, “The silver lining for India is that while higher proportion of companies witnessed fraud during 2017, increasing number of companies are also becoming aware of risks related to fraud and are taking preventive measures to tackle the issue,”
“In coming years, however, combating information security risks would gain priority as fraud risk due to information theft is only likely to increase as India chases its digitization dream," he added.
