Financial Services Bear Brunt of Losses


“The risk of fraud is part of doing business. It can even be considered a consequence.”

According to a joint survey of 892 senior executives by Kroll, a risk consulting company, and the Economist Intelligence Unit, the statement above by Andres Antonius, president of Kroll’s consulting group, rings especially true for financial services institutions.

More than 80% of the executives reported a fraud loss at their companies over the past three years. The average fraud loss during this time was $14.6 million—double that of all industries and the highest in the survey.

Financial services executives identified their highest areas of vulnerability as information theft, loss or attack (26%) and management conflict of interest (18%), but reported their most frequent areas of loss to be regulatory or compliance breaches (29%) and internal financial fraud or theft (28%).

In all industries, high staff turnover was the most frequent cause of the increased exposure to fraud, followed by: complex information technology arrangements; an increased collaboration between unrelated companies; and the entry into new markets, particularly for larger corporations, where one in 10 reported losing more than $100 million to fraud.

Source: 2007/2008 Kroll Global Fraud Report, www.kroll.com/fraud.

SPONSORED REPORT

Tax reform complicates year-end tax planning

Get your clients ready for tax season with these year-end tax planning strategies, which address how to make the most of recent tax law changes, such as the new deduction for qualified business income and the cap on the deductibility of state and local taxes.

VIDEO

What RPA is and how it works

Robotic process automation is like an Excel macro that can work on multiple applications, says Danielle Supkis Cheek, CPA. RPA can complete routine, repetitive tasks such as data entry, freeing up employee time from lower-level chores.