FTSE 350 firms estimated to have lost £28 billion due to fraud in 2019 – and predicted to see an increase in 2020 and beyond.
In times of most global crises – whether a financial crash, economic slump or the current pandemic – a spike in corporate fraud typically tends to follow.
After the last financial crisis in 2008, figures published by the Office for National Statistics (ONS) identified that those charged with fraud offences increased by 21% in the following two years. This occurred for a variety of reasons. First and foremost, there is increased opportunity available to fraudsters. Senior management teams of most companies are rightly focussed on other things, trying to keep their businesses afloat and their staff in jobs for a start. A crafty fraudster will see this as a ripe opportunity to pounce, with minimal chance of being caught, as the usual security checks and balances may have temporarily fallen by the wayside.
A perfect storm for fraudsters
Increased home working in times such as now also means less people at work overseeing finance, security and operations. This inevitably gives fraudsters more opportunity, with less scrutiny, more freedom and fewer questions asked. Added to this mix is the likely heightened concern over job security too, so the need to commit fraud also rises and employees may well turn to other means of supporting themselves in desperate times.
All of these factors combined make a global crisis the perfect climate for fraud to germinate and gather pace.