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Theft of companies’ electronic data outstrips theft of physical assets: fraud study


October 18, 2010   by Canadian Underwriter


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Theft of information and electronic data at global companies has overtaken physical theft for the first time, according to the latest edition of the Kroll Annual Global Fraud Report. The 2010 study shows the amount businesses lost to fraud rose from $1.4 million to $1.7 million per $1 billion of sales in the past 12 months – an increase of more than 20%.
The findings are the result of a study commissioned by Kroll with the Economist Intelligence Unit of more than 800 senior executives worldwide.
Nearly a third (29%) of the respondents were based in North America, 25% in Europe, just under a quarter from Asia-Pacific region and 11% each from Latin America and the Middle East and Africa.
Although physical theft of cash, assets and inventory has been the most widespread fraud by a considerable margin in previous Global Fraud Reports, this year’s findings reveal theft of information or assets was reported by 27.3% of companies over the past 12 months – up from 18% in 2009.
In contrast, reported incidents of theft of physical assets or stock declined slightly from 28% in 2009 to 27.2% in 2010.
“Theft of confidential information is on the rise because data is increasingly portable and perpetrators – often departing or disgruntled employees – can remove it with ease absent sufficient controls,” said Robert Brenner, vice president of Kroll’s Americas region. “The results of the survey do not suggest other types of fraud are decreasing, but merely that the rise in theft of intellectual capital has outstripped other fraudulent activity that has remained constant.”
Information-based industries reported the highest incidence of theft of information and electronic data over the past 12 months. These include financial services (42% in 2010 versus 24% in 2009), professional services (40% in 2010 versus 27% in 2009) and technology, media and telecoms (37% in 2010 versus 29% in 2009).
The speed of technological developments poses new challenges in the fight against fraud, the Kroll study found.
Nearly one-third (28%) of respondents cited the complexity of information infrastructure as the single most important factor in raising their exposure to fraud.
However, despite the increased risks, only 48% of companies are planning to spend more on information security in the next 12 months, down from 51% last year.

 

 


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