Asset misappropriation, business misconduct and fraud committed by consumers are the three most frequent types of fraud
Financial fraud is on the up in the Middle East, according to a new report from PwC.
Its 2018 Middle East Economic Crime and Fraud Survey revealed a significant increase in the number of financial fraud cases at 34 percent in 2017 compared to 26 percent in the previous year.
PwC said asset misappropriation, business misconduct and fraud committed by consumers are the three most frequent types of fraud and/or economic crime reported by respondents.
Internal audit was the main contributor to detecting the most disruptive fraud experienced by respondents in the last 24 months (20 percent) followed by internal tip-offs (18 percent), fraud risk management and suspicious activity monitoring (both at 14 percent).
PwC added that regional organisations are realising the rising value of anti-fraud technologies, and are looking to extend their investment and usage of it.
Nick Robinson, forensic leader at PwC Middle East said: “Social and environmental pressures are increasing the focus on fraud and economic crime issues across the region. This rise is unsurprising as these issues are becoming more acute within organisations.”
The report said fraud instigated by internal fraud actors is increasing rapidly, accounting for 48 percent of economic crimes reported in the Middle East slightly below the global average of 52 percent.
It added that senior and middle management are the main perpetrators of internal frauds, accounting for 62 percent of those reported.
"Our study shows that the proportion of organisations that have performed a fraud and economic crime risk assessment within the past 24 months has leapt to 77 percent in 2018 from 47 percent in 2016," Robinson added.
To tackle fraud, 42 percent of Middle East organisations said they have increased the amount of money allocated to combating fraud and economic crime within the past 24 months, while 49 percent plan to increase it in the next 24 months.
The report added that over the past 24 months, disruptive economic crime has cost 46 percent of respondent organisations between $100,000 and $50 million.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.