Fraud Professionals Expect Fraud to Surge in the Next Year. Here’s How to Fight It.
A recent ACFE report shows that organizations are witnessing more fraud in the wake of COVID-19.
Fully 77% of respondents say they have seen an increase in fraud just since August 2020—up from 68% in May 2020. One-third of these surveyed say that the growth in fraud they’ve seen has been significant. More concerningly, 92% of respondents expect to see continuing increases in fraud over the next 12 months.
However, the good news is that there is a way to prepare: by having the right data analytics solution for fraud detection.
Specific Frauds that Pose Heightened Risk
While frauds of all kinds have increased during the pandemic period, the same report tells us some specific types of fraud that are on the rise pose a particular risk to organizations than do other types.
Cyberfraud—a broad category that encompasses business email phishing attacks, as well as hacking, ransomware, and malware—poses the most significant security risks for organizations.
Over 80% of businesses report that they have already seen an increase in cyberfraud since the beginning of the pandemic, with 90% anticipating further such attacks over the next year (up from 81% in May 2020).
Other kinds of fraud on the rise include
- Unemployment and pandemic relief fraud.
- Payment frauds via credit card and fraudulent mobile accounts.
- Fraud activity by vendors and sellers, such as price gouging and overbilling.
Challenges in Fighting Fraud
As at any time, there are challenges facing organizations that try to detect and prevent fraud effectively. However, as with so many aspects of our work and life in these unprecedented times, the pandemic presents an added layer of difficulty.
While the first guess as to difficulties might be shrinking budgets, in general, respondents to the survey indicated that their budgets for anti-fraud detection would either increase (38%) or remain the same (48%). Likewise, 44% of respondents indicated that they would be making new or increased investments in anti-fraud technology. So, in this case, money is not the issue.
Instead, the primary challenge turns out to be directly pandemic related. Businesses surveyed indicate that physical restrictions on individuals and groups are the primary hurdle for fraud investigation and prevention. With on-going or rolling lockdowns continuing to happen in many jurisdictions, staff’s inability to be in the office (27%) or travel for investigations (43%) has presented challenges in furthering investigations during the pandemic.
Respondents report issues and challenges with conducting remote interviews with relevant parties (36%) and lack of access to physical and digital evidence (33%) as significant challenges to driving investigations forward during COVID-19.
How Data Analytics Can Help Fight Fraud
It’s heartening to learn that 44% of those surveyed by ACFE said they planned on making new or increased investments in anti-fraud technology. We agree with them that anti-fraud technology is the way of the future for fraud detection and prevention, and nowhere is that truer than with data analytics.
Data analytics is a powerful tool for helping make sense of massive amounts of data. It lets machines do what humans simply can’t: analyze every piece of data that could indicate fraud activity without missing or overlooking anything. That’s why data analytics represents a game-changing approach in the world of fraud detection for audit, accounting, and finance professionals globally.
CaseWare’s IDEA Data Analysis Software is a comprehensive, powerful, and easy-to-use data analysis solution designed by audit experts. Whether you want to identify anomalies, trends, or patterns, IDEA offers anti-fraud solutions and data analytics tools to keep fraud under wraps.
IDEA can identify unusual and suspect transactions. It can perform personnel vetting, independent authorization of transactions, and observation of employee activities while on business systems. The larger the volumes and the more detailed the system’s information, the more useful IDEA becomes.
To find out more about how IDEA can help your organization detect fraud activity during the pandemic and afterward and arrange for a demo, click here now.