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Combating fraud and cyber risks: more management impetus needed

Reuben Khoo, Asean Leader, Fraud Investigation & Dispute Services, EY | May 20, 2016
If the current regulatory enforcement environment and market reaction to instances of alleged fraud and cyber breaches are signs of greater accountability to come, it is time that organizations take a harder look at their risk preparedness – and this has to begin with a mindset change right from the top.

Yet, businesses seem to lag in this aspect, judging from the findings of a previous EY survey where just more than half of the respondents globally - a dip from previous year - said that their FDA spend is sufficient.

Lagging investments in forensic data analytics

Convincing senior management of investment in FDA remains a fairly significant roadblock, as survey findings point to a need to improve management's awareness of the benefits of FDA in the company's anti-fraud program. The gap that exists between management's perception of the need for FDA and their reluctance to fund it could be due to a lack of awareness of the full spectrum of risk management benefits that FDA can deliver.

The reality is that the full benefits of FDA are not reaped when FDA capabilities and techniques are not aligned to the risk issues that organizations are trying to address. It is only through using purpose-fit technology capabilities and advanced analytics to help focus prevention, detection, investigative and compliance monitoring efforts that FDA can deliver the expected benefits, including cost reduction, which matters to senior management.

Clearly, the challenges associated with hesitation to invest in FDA are further compounded with the CFO's perception of cybercrime as a low risk. If the current regulatory enforcement environment and market reaction to instances of alleged fraud and cyber breaches are signs of greater accountability to come, it is time that organizations take a harder look at their risk preparedness - and this has to begin with a mindset change right from the top.

 

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