Cyber breaches and insider threats, which include malicious insiders stealing, manipulating or destroying data, are the fastest-growing risks according to executives and are driving investment in FDA, finds EY’s 2016 Global Forensic Data Analytics Survey, Shifting into high gear: mitigating risks and demonstrating returns.
The survey was conducted with 665 executives globally across nine industry sectors, including financial services, life sciences, manufacturing and power and utilities. When looking at the current use of FDA tools to investigate incidents or manage risk, the survey found that internal fraud risk ranks highest for the application of FDA at 77% and cyber breach or insider threat risk ranks second at 70%.
Sixty-nine percent say that they need to do more to improve their current anti-fraud procedures, including the use of FDA tools.
Notably, this figure increased to 74% for the C-suite cohort. Of those respondents citing regulatory pressure as the reason to improve their procedures, C-suite respondents were found to be the most concerned as regulatory enforcement becomes more rigorous and widespread.
Burcin Atakan, Lider Fraud Investigation & Dispute Services (FIDS) EY Romania, says: „Cybercrime threat is a daily reality for companies and a continuous and dynamic challenge. This means that executives and top management must include FDA as a critical component of their compliance and risk management programs. The need for these investments is also emphasized by the current regulatory environment and the market’s reaction to alleged fraud, bribery and cyberattacks within the corporate environment."
Increased FDA investment
With just 55% of respondents saying that their FDA spend is sufficient, a drop from 64% in our 2014 survey, it is no surprise that three out of five say that they plan to spend more on FDA in the next two years.
When looking at the reasons for increased investment, the survey found that responding to growing cybercrime risks and increased regulatory scrutiny are the top drivers at 53% and 43%, respectively. How FDA tools are deployed is also changing, with 63% of respondents saying they invest at least half of their FDA budget on proactive monitoring activities.
FDA use on the rise
In response to these increased risks, the use of advanced FDA is becoming mainstream, with new technologies and surveillance monitoring techniques widely used to help companies manage current and emerging fraud and cyber risks. The rising maturity of corporate FDA efforts is also evident through the growing sophistication in their use of data. Seventy-five percent of respondents routinely analyze a wide range of structured and unstructured data, enabling them to gain a comprehensive view of their risk environment.
Burcin Atakan points out: „Given the pressure level faced by organizations from the fraud prevention perspective, it is not surprising at all that most respondents place increased efforts in supporting proactive initiatives. Supervising and monitoring which use FDA tools may help organizations strengthen their compliance with regulatory requirements, enhance corporate culture and foster confidence coming from the regulatory bodies and other actors on the market, interested in the wellbeing of the company."
Roxana Prisacaru, Manager Fraud Investigation & Dispute Services (FIDS) EY Romania, emphasizes the fact that “EY’s experience in the region is based on various and complex investigations performed with the help of advanced and internationally-qualified information technology resources, which ensure the flexibility and scalability required to fit the clients’ needs.”
FDA maturity leads to positive results
The findings also show that there are striking similarities among those organizations that have reported positive results from their FDA efforts, such as:
? Investing more of their total compliance and anti-fraud spend in FDA
? Harnessing sophisticated analytics tools, including social media, web monitoring and data visualization, in combination to identify rogue activities, patterns and trends
? Incorporating larger data volumes and a wider variety of data sources (both structured and unstructured)
Burcin Atakan concludes: „Traditionally, organizations resort to advanced FDA tools as part of investigations. However, nowadays, FDA tools are essential for proactive risk management. Organizations must admit the role of FDA tools not only in reactive investigations but also in proactive supervision, compliance and efforts in response to cybercrime and cyber fraud."
