Address the pervasive challenges of economic crime​

For over 20 years, PwC’s Global Economic Crime and Fraud Survey (GECS) has analysed fraud and economic crime worldwide to enable companies to better navigate the fraud risk landscape. ​Recently published findings of PwC’s GECS 2024 provided a deep dive on some of the most challenging fraud risks and areas of action to improve fraud risk management and compliance: strengthening risk assessments, improving third-party risk management practices, and better leveraging data and analytics on behalf of compliance and investigations.

​The survey was conducted between January and March 2024, when PwC​ surveyed nearly 2,500 companies across 63 territories, including Singapore. Using information collected during the survey, we focused on insights reported by Singapore based participants, aiming to identify their specific concerns compared to global average that could be useful to better appreciate existing challenges (the “Singapore Highlights”).

In our 2024 survey, 41% of global participants reported experiencing fraud in their home location. Singapore-based participants reported a lower domestic fraud rate of 33%, reflecting the relative safety of the local market. However, the story changes dramatically for Singapore-based companies' overseas operations, where the fraud rate spikes to 58%, nearly double the global average of 29%.​

​This high overseas fraud rate can partly be explained by the extensive foreign operations of large Singapore-based companies, especially those with annual revenues above USD 10 billion. Yet, this alone doesn't fully account for the elevated rate compared to other Southeast Asian countries and India. For Singapore-based companies, focusing on mitigating fraud in their international operations is crucial.​

As illustrated by the chart below, across the world, among the companies which suffered fraud in the last 24 months, more than one in three encountered cybercrime and/or customer fraud, which remain the most prevalent types of economic crime reported by the survey participants. ​They are followed by procurement fraud, asset misappropriation, and bribery and corruption.​

In our fast-evolving technological world, fraud schemes continuously adapt. An enterprise-wide fraud risk assessment is vital for identifying risks and improving detection and prevention. However, only 52% of Singapore businesses performed such assessments recently, trailing behind the global average of 59% and other regions like North America (74%) and Western Europe (62%). This lack of focus leaves Singapore companies vulnerable, especially in international operations.​

Procurement fraud comes across as a persistent threat globally:

• 55% of participants globally identified it as a widespread concern;
• 29% of participants encountered it in the last 24 months;
  
• 22% of those who encountered procurement fraud, considered it as the most disruptive.
  

​In Singapore, only 25% of organisations confirmed that they attempt to quantify the cost of procurement fraud against a 53% global average.

While organisations emphasise procurement policies to counter fraud, the use of data analytics remains low, with only one in four leveraging it to detect unusual bid patterns. Customising technological controls to specific risks is essential but requires detailed risk assessments at the business unit and geographical location levels.​

​To improve fraud prevention and detection, organisations must better understand procurement fraud risks and tailor their technological tools accordingly.​

Risks are inevitable. It is whether a company takes, and mitigates risks intelligently and thrive that sets leaders apart.​

Economic crime risk is more complex than ever before – and it is far more challenging to both create value and protect it.​

On a positive note, there are practical solutions and tools available to help organisations in their journey.

To enable their effective use, in depth understanding of specific risks and challenges will help taking pragmatic and balanced decisions when building defences.​