India sees rise in corporate frauds
MUMBAI: India has seen a significant rise in incidence of fraud, cyber and security related incidents over the last 12 months, which according to a private survey is higher than the global average. Around 89 per cent of the respondents in India who participated in the Kroll global fraud survey report said that they had experienced a fraud incident in the past one year, which is significantly higher than the global average of 84 per cent.
Respondents in India reported one of the world’s highest incidences of theft of physical assets or stock, with two-fifths saying they had experienced this type of fraud, second only to those in Canada. Theft of intellectual property and market collusion are also high on the list of incidents of fraud in India. What is more interesting is that a higher proportion of respondents (45 per cent) in India cited joint venture partners as the main reason for increased exposure to fraud while 43 per cent attributed the role of junior employees for the likely occurrence of frauds.
According to the survey, India figures among the top three countries globally for every category measuring fraud vulnerability except for vendor, supplier, or procurement fraud. Nearly nine in 10 respondents (87 per cent) cited information theft, loss, or attack as their greatest concern, 30 percentage points higher than the global average of 57 per cent.
Internal financial fraud, IP theft, piracy, and counterfeiting were also significantly higher than the global averages. However, the survey noted that Indian corporates are becoming more aware of the risks and are implementing preventive measures such as financial controls and physical security systems. Coming to cyber related frauds, 84 per cent of the respondents said they experienced a cyber attack in the last one year. Nearly half of these respondents experienced email-based phishing attacks. Virus/worm attacks were the second most common type of incident reported. The most common targets for cyber attacks in India were employee records, trade secrets or intellectual property and customer records.