Revealing that every one of the two organisations surveyed has encountered fraud incidents following the pandemic, Grant Thornton Bharat’s latest ‘Financial & Cyber Fraud Survey’ sheds light on the rising challenges in the current business environment. Of these, a significant 77% of Indian organisations have noticed an uptick in fraudulent activities. The survey identifies cyber, diversion of assets, and regulatory as the predominant areas of fraud that significantly impact various businesses’ operational and financial integrity.
Nearly half of the respondents attributed this rise in fraudulent activities to the shift from onsite to remote work environments and the subsequent lack of stringent internal controls. Specifically, cyber incidents account for 64% of these frauds, underscoring businesses’ critical vulnerabilities as they navigate increasingly digital landscapes.
“Our survey highlights the growing awareness among organisations regarding fraud prevention, with 60% of companies now prioritising cybersecurity and anti-fraud technologies on their strategic agenda,” states Samir Paranjpe, Partner, Grant Thornton Bharat. “This proactive stance is crucial as it emphasises the urgent need for advanced technologies like AI and machine learning, which are currently underutilised, with only about 20% adoption across surveyed entities,” Paranjpe further mentions.
Furthermore, the study underscores the significant financial impact of these fraudulent activities, revealing that one-fourth of the organisations surveyed have suffered losses of INR 1 crore and above, with three-fourths of such organisations faced financial damages exceeding INR 5 crore. As businesses grapple with these challenges, more than 3 out of 5 organisations across various sizes and industries support a collaborative approach with forensic professionals to investigate frauds. The most affected industries include Technology, Media, and Telecommunications (58%), financial services (51%), and manufacturing (46%), highlighting the critical need for tailored anti-fraud strategies to address their unique vulnerabilities.
Delving deeper into the specifics, the survey reveals that 84% of organisations experiencing fraud noted the role of an external perpetrator either standalone or colluding with individuals within the organisation. Frauds by external parties are particularly concerning in sectors like financial services, where complex regulations and cross-border operations heighten risks.
“Our survey underscores the undeniable influence of regulatory dynamics, with a significant 68% of the respondents pointing to regulatory changes and enforcement actions as the primary force driving the establishment of governance and cybersecurity protocols. This demands a robust and proactive approach, reinforced by strong internal controls and a culture of compliance for building resilience and mitigating fraud risks in today’s evolving business environment,” shares Rahul Lalit, Partner, Grant Thornton Bharat.
Post-COVID-19, 73% of organisations have enhanced their governance and compliance frameworks, 63% have implemented enhanced awareness training for employees, third-parties, and customers, and 62% are conducting continuous control assessments of high-risk areas at regular intervals. By embracing tailored solutions and advanced technologies, organisations can strengthen internal controls and foster a culture of awareness, ultimately promoting trust, resilience, and a competitive edge in today’s complex market.
