A PwC report has suggested that a surge in business fraud in Ireland is being fuelled by cybercrime and exacerbated by Covid-19.
In the 2020 PwC Irish Economic Crime Survey, 51pc of more than 70 organisations surveyed in Ireland said they had experienced fraud in the past two years. Of those that experienced fraud, 61pc said they had two or more incidents during that time.
The findings were part of a wider global PwC survey of more than 5,000 responses from 99 countries, including Ireland.
PwC said that business fraud in Ireland is at a record high, fuelled by cybercrime. Incidence of cybercrime in Ireland was found to be double that experienced by global companies and three times more disruptive.
“This is a significant finding given that Ireland is now Europe’s largest data hosting cluster,” said Will O’Brien, PwC Ireland’s director of cyber practice.
“This finding is a concern for Ireland’s digital economy and highlights the importance of continued investment and resources in cybersecurity to mitigate cyber risk and ensure we are cyber resilient at a national level.”
Breaking down the type of fraud experienced by the survey’s respondents, it included customer fraud (41pc), asset misappropriation (23pc), accounting fraud (15pc) and money laundering (13pc).
According to the survey, 13pc of these fraud incidents in Ireland resulted in a loss of more than €4m, while 18pc of respondents said that financial damage to the company was unknown. Just under half (46pc) of organisations claimed that they did not report incidents of fraud to their board, while 21pc conducted no investigation into incidents.
A ‘perfect storm for fraud’
However, 62pc of respondents claimed that their organisation emerged in a better place following cases of fraud.
More than one in 10 companies said they have spent more than €800,000 in remediation after an incident, such as improved cybersecurity and introducing new technologies. Since the onset of the Covid-19 pandemic, 68pc said they had enhanced internal controls to combat fraud and economic crime.
However, the report found Irish businesses are lagging behind other countries when it comes to using these new technologies, with 58pc not using machine learning versus 31pc globally. Less than 20pc of Irish businesses strongly agreed that they’ve been able to upgrade their systems to combat fraud in the past two years, with cost largely being a barrier for companies.
According to PwC Ireland’s cyber leader, Pat Moran, before and after a major crisis is a “perfect storm for fraud” including incidents of phishing and smishing.
Deirdre McGrath, a PwC Ireland partner in forensics, added: “To combat fraud, businesses need to relook at their risks in this new environment, and the suite of anti-fraud tools they use to prevent and detect fraud.
“Importantly, the right governance and a good culture are also required to effectively fight fraud.”