Most Crime is Perpetrated by Employees Already Inside Companies

KPMG’s Fraud Barometer Says Most Crime is Perpetrated by Employees and Managers Already Inside Companies

The introspective look at the UK’s £1.2 billion in 2018 fraud cases by KPMG demonstrates the need to be mindful of insiders.

Each year, professional services company KMPG puts out their annual Fraud Barometer report, providing readers with the state of corporate fraud.

• The number of fraud cases reaching courts in the UK rose by 78% in 2018
• Over two-thirds of fraud cases were valued at over £10 million
• Employee fraud accounts for over 50% of fraud in Scotland

KPMG provide the example of a junior clerk who embezzled £600,000 from a financial services company over a period of 14 years. They did so to fund expensive vacations around the world, including a multi-week trips to the Far East and the U.S., as well as cruises in the Caribbean.  How did they do it? The clerk simply identified payments that had been returned or where the policyholder had died and then diverted the payments to himself.

According to the report, insider fraud has risen dramatically; fraud by management has risen by nearly two-thirds over the previous year, and fraud committed by non-management employees has risen by over 50%.

Organizations need to have solutions in place to both spot fraudulent activity and to identify leading indicators of a potential threat. Through the use of Employee Monitoring Software, organizations can be alerted when specific activities deemed potentially harmful or suspicious occur. And by using User Behavior Analytics, organizations can detect leading indicators of insider threat activity – such as shifts in behavior and communications – that may help allow organizations to respond before fraud activity occurs.