As fraud costs increase, companies look to emerging tech to cut risk
With more companies reporting instances of fraud, a KPMG Canada survey found 85% of Canadian organizations are interested in using new and emerging technology to fend off potential attacks. The survey polled 505 Canadian companies in February 2023.
Three quarters of surveyed firms reported either internal fraud (by an employee) or external fraud (including credit card fraud, fake cheques, fake invoices, or identity fraud) in the past year.
A strong majority of companies (87%) said they had a program in place to prevent, detect, and respond to fraud.
“The threat landscape is constantly changing as fraudsters are continually devising ways to bypass and circumvent the prevention controls organizations implement,” said Marilyn Abate, a partner in KPMG Canada’s forensic and financial crimes practice. “So even if companies think they have an effective anti-fraud program in place, it won’t be long before it’s cracked by a criminal. Businesses need to stay ahead of the threat.”
The Canadian Anti-Fraud Centre received 90,137 reports of fraud in 2022, with a reported $530 million in losses, up significantly from $379 million in 2021 and $165 million in 2020.
Eighty-five percent of companies are actively considering investing in AI, machine learning, and biometrics as tools to better prevent and detect fraud.
“Companies need these technologies to provide nimble and strong protection to combat an ever-evolving fraud landscape,” Abate added. “If they don’t invest in the tools and processes to combat fraud, they could be at risk of significant losses.”
Myriam Duguay, a forensics partner at KPMG, says organizations can take several steps to better prevent, detect, and manage fraud. Duguay recommends implementing and frequently updating an enterprise-wide anti-fraud program, including a fraud risk assessment; actively monitoring third-party risk; maintaining a whistleblower program; delivering anti-fraud training to staff; employing active surveillance and data monitoring; and aligning operations across fraud, financial crime, and cybersecurity.
