The number of emerging threats is on the rise. 71% of organizations report business email compromises, 65% experience social engineering attacks and 54% face identity theft.
Grant Thornton Bharat’s latest ‘Financial & Cyber Fraud Survey reveals that both organisations surveyed have experienced fraud incidents as a result of the pandemic. This highlights the challenges facing businesses today. 77% of Indian organizations have seen an increase in fraudulent activities. The survey shows that cyber, asset diversion, and regulatory fraud are the most prevalent areas of fraud. These have a significant impact on various businesses’ financial and operational integrity.
Nearly half of respondents attributed the rise in fraud to the shift to remote working environments and the lack of strict internal controls that followed. Cyber incidents are responsible for 64% frauds. This highlights the critical vulnerabilities of businesses as they navigate increasingly digital environments.
Samir Paranjpe is a Partner at Grant Thornton Bharat. He says, “Our survey shows that organisations are becoming more aware of fraud prevention. 60% of companies have placed cybersecurity and anti-fraud technology on their strategic agenda.” This proactive stance is important as it highlights the urgent need for advanced technology like AI and machine-learning, which are currently underutilised. Only about 20% of entities surveyed have adopted these technologies,” paranjpe continues.
The study also highlights the financial impact of these fraudulent acts, revealing that a quarter of the organisations surveyed suffered losses of INR 1.0 crore or more, and three-fourths had financial damages of INR 5.0 crore. More than 3 out 5 organisations, across all sizes and industries, support a collaborative approach to fraud investigation with forensic professionals. The most affected industries are Technology, Media, and Telecommunications (58%) Financial Services (51%), and Manufacturing (46%). This highlights the need for tailored antifraud strategies that address their unique vulnerabilities.
The survey revealed that 84% of the organisations who experienced fraud attributed the fraud to an external perpetrator, either acting alone or in collusion with individuals within the organization. Frauds committed by third parties are especially concerning in sectors such as financial services where complex regulations and international operations increase the risk.
“Our study highlights the undeniable impact of regulatory dynamics. A significant 68% of respondents cite regulatory changes and enforcement action as the primary factor driving the establishment and implementation of cybersecurity and governance protocols. This requires a robust, proactive approach, reinforced with strong internal controls, and a culture that promotes compliance, to build resilience and mitigate fraud risks in today’s changing business environment .
After COVID-19, 73% organisations have improved their governance and compliance frameworks. 63% have implemented enhanced training for employees, customers, and third parties. And 62% conduct continuous control assessments at regular intervals. By adopting tailored solutions and advanced technology, organisations can foster a culture awareness and strengthen internal controls, promoting trust and resilience in today’s complicated market.
Financial and Cyberfraud Report 2024_Grant Thornton Bharat