Fraud, cyber, security attacks now 'the new norm' for GCC firms
New survey of company execs reveals 'significant rise' in fraud cases and cyber incidents
Fraud, cyber, and security incidents are now the "new normal" for Gulf companies, according to executives surveyed for the 2016/17 Kroll Annual Global Fraud and Risk Report.
The proportion of executives that reported their companies fell victim to fraud in the past year rose significantly to 88 percent, from 62% in 2015, highlighting the escalating threat to corporate reputation and regulatory compliance.
The Gulf region saw the highest rise in fraud incidents of any region across the world, a statement said.
Cyber incidents were even more commonplace with 90 percent of executives surveyed saying their company has suffered a cyber incident over the past 12 months. Over eight in 10 (82%) reported the occurrence of at least one security incident over the course of the year.
Despite widespread concerns about external attacks, the findings also revealed that the most common perpetrators of fraud, cyber, and security incidents over the past 12 months were current and former employees.
Senior or middle management were cited as key perpetrators in two-fifths (36%) of fraud cases, followed by junior staff (34%).
Third party entities were also considered to have significant roles in most fraud incidents, with joint venture partners, vendors, suppliers and agents names by around a quarter of respondents. Former employees were also identified as responsible for 20% of incidents reported.
Tom Everett-Heath, regional managing director, said: "This year's Kroll Global Fraud and Risk Report has the highest proportion of companies reporting fraud and rising levels of cyber and security breaches. The impact of such incidents is significant, with punitive effects on company revenues, business continuity, corporate reputation, customer relations, and employee morale, as well as the risk of regulatory intervention.
"With fraud, cyber, and security incidents becoming the new normal for companies all over the world, it's clear that organizations need to have systemic processes in place to prevent, detect, and respond to these risks if they are to avoid reputational and financial damage. As important is the need for effective, thorough and timely responses when incidents are detected."
According to the report, the incidence of fraud in the GCC was 6% above the global average of 82%.
A broad range of cyber incidents were reported. The single most common types of incident reported was a virus or worm infestation, reported by almost one-third of all companies and data deletion or loss due to system issues.
Twenty percent of respondents said data breaches resulted in loss of customer or employee data, while 16% reported loss of IP, trade secrets, or R&D.
Daniel Turner, associate managing director in Kroll's Dubai office, said: "The incidence of fraud, cyber and security incidents in the region continues to climb markedly. Companies are increasingly operating in a global business environment fraught with high and mounting risks and repercussions.
"These risks can be mitigated through the adoption of a conscious and proactive approach and through the implementation of employee and partner education programs and a tighter set of policies that help remove avoidable errors and poor business practices."