We are pleased to present our Report for Ukraine, which is based on the results of the Global Economic Crime and Fraud Survey 2018, one of the premier thought leadership publications on economic crime and fraud in the business world.
This is the ninth time the Global Economic Crime and Fraud Survey has been prepared with over 7,000 respondents from 123 countries contributing to the survey results.
The survey has been carried out biennially in Ukraine since 2009 and this has allowed us to observe trends of the most common types of fraud and its impact on Ukrainian organisations, as well a oversee changes in fraud prevention efforts taken by organisations.
How fraud looks like?
48% of Ukrainian respondents reported their organisations being victims of economic crime in the last two years.
Bribery and corruption (73%) continues to lead in economic crime experienced by organisations in the last 24 months, asset misappropriation (46%), procurement fraud (33%), HR fraud (33%) and cybercrime (31%) are close behind.
Bribery and сorruption is predicted to be the most disruptive fraud for Ukrainian organisations in the next two years.
What is the cost of fraud?
31% of respondents reporting losses of over $100 thousand from the most disruptive fraud and 12% among them pointed the losses of between $1 million and $50 million.
Damage from fraud goes far beyond financial losses. Ukrainian organisations reported that reputation/ brand strength (50%), business relations (42%) and relations with regulators (38%) suffered significantly from economic crimes.
58% of Ukrainian respondents described employee morale as being damaged by the most serious fraud.
Who is the main perpetrator?
This year’s survey revealed a significant increase (+28% to 56%) in the share of economic crime committed by internal actors. There was also a jump in the percentage of those crimes attributed to senior management (from 27% in 2016 to 55% in 2018).
67% of external perpetrators (responsible for 36% of fraud) are “frenemies” of the organisation – people the organisation works with, including agents, vendors and customers.
How organisations prevent fraud?
Despite the increase in spending, many Ukrainian organisations are still addressing fraud prevention using a reactive, defensive approach.
Only 40% of organisations in Ukraine said they had conducted a general fraud risk assessment in the past two years. Almost every fifth organisation (17%) had not performed any risk assessment at all in the past two years.
Additionally, the percentage of respondents who indicated they have a formal business ethics and compliance programme has dropped from 75% to 59%.
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