Photo - Joyce Lim, EY Malaysia's Leader of Fraud Investigation & Dispute Services (FIDS).
According to professional services firm EY (Ernst & Young) Malaysia's 2016 Global Forensic Data Analytics Survey, there is a significant increase in risk from cyber breaches and insider threats among top drivers of investment in forensic data analytics (FDA).
Joyce Lim, EY Malaysia's leader of Fraud Investigation & Dispute Services (FIDS), said cyber breaches and insider threats, which include malicious insiders stealing, manipulating or destroying data, are the fastest-growing risks.
"For organisations, the threat of cybercrime is an everyday reality, posing a dynamic and relentless challenge," said Lim.
"This means that boards and senior management need to incorporate FDA as a critical component of their risk management and compliance programs," she said.
"This is especially critical given the current regulatory enforcement environment and market reaction to instances of alleged corporate fraud, bribery and cyber breach," added Lim.
Lim said that some of the key takeaways from EY's 2016 Global Forensic Data Analytics Survey, Shifting into high gear: mitigating risks and demonstrating returns, include:
- Three out of five respondents plan to increase their spending on forensic data analytics (FDA) over the next two years
- The use of data visualisation tools to prevent and detect fraud has doubled since the 2014 FDA survey
- Leading companies are leveraging large and varied data sets that incorporate structured and unstructured data sources
Sixty-nine percent say that they need to do more to improve their current anti-fraud procedures, including the use of FDA tools, she said.
Lim said that this figure increased to 74 percent 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.
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 percent and cyber breach or insider threat risk ranks second at 70 percent.
"Given the level of pressure organizations are facing on fraud prevention, it is no surprise that the majority of respondents are expending more effort on proactive initiatives," Lim added. "Surveillance monitoring programs using FDA can help organizations to strengthen their compliance programs, improving corporate culture and bolstering the confidence of regulators and other stakeholders."
"Traditionally, organisations turn to advanced FDA tools to help with their investigations," she said. "However, today, FDA is becoming indispensable to proactive risk management. Organisations need to recognise the role FDA can play not only in their reactive investigations, but also in their proactive surveillance, compliance, anti-fraud and cyber breach response efforts."
The survey was conducted with 665 executives globally across nine industry sectors, including financial services, life sciences, manufacturing and power and utilities.
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