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Supply chain financial crime rates holding steady, but few tap blockchain to help

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During the past five years, an average of 31.1 percent of respondents to annual Deloitte polls say their organizations have experienced supply chain financial crime—particularly fraud, waste or abuse—in the preceding year. Yet, in a 2018 poll, just 15.1 percent of respondents report their organizations are using (3.9 percent) or piloting (11.2 percent) blockchain to help mitigate financial crime risks in their supply chains. See more responses from over 2,430 professionals were polled online during a Deloitte Dbriefs webcast, titled “Supply chain forensics: New insights on fraud, waste and abuse,” on July 24, 2018.

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Supply chain financial crime rates holding steady, but few tap blockchain to help

  1. 1. Supply chain forensics: New insights on fraud, waste and abuse Deloitte poll results from July 2018
  2. 2. Supply chain forensics: New insights on fraud, waste, and abuse Copyright © 2018 Deloitte Development LLC. All rights reserved. 2 Methodology Professionals were polled online during a Deloitte Dbriefs webcast, titled “Supply chain forensics: New insights on fraud, waste and abuse,” on July 24, 2018. Most poll respondents work in the consumer products (CSNR; 26.7%), financial services (FS; 21.4%), technology, media and telecoms (TMT; 15.9%); energy, resources and industrials (ER&I; 13.9%); life sciences and health care (LSHC; 8.8%); and, government and public sector (GPS: 5.5%) industries. Similar online polls were conducted in June 2017, January 2016, February 2015 and February 2014. Answer rates differed by question and respondents varied by year. Data totals for certain questions may not equal 100.0% due to the rounding of raw data to the nearest tenth of a percentage. 2,430+ 2
  3. 3. Supply chain forensics: New insights on fraud, waste, and abuse Copyright © 2018 Deloitte Development LLC. All rights reserved. 3 How would you describe your organization's use of blockchain to mitigate financial crime risks (e.g., fraud, waste and abuse) in its supply chain? Comparing responses by industry Votes received in July 2018: 3,027 Don’t know / Not Applicable = 35.2% CNSR; 34% ER&I; 43.5% FSI; 40.4% GPS; 35.1% LSHC; 35.1% TMT; 38.2% Average 34.7% 39.1% 37.5% 25.7% 40.4% 36.3% 31.0% 12.1% 12.1% 13.1% 10.0% 11.1% 11.8% 12.4% 11.2% 10.2% 10.7% 15.1% 5.8% 13.0% 11.1% 3.9% 3.3% 4.7% 5.7% 2.3% 3.8% 2.9% Average CNSR ER&I FS GPS LSHC TMT Advanced - we use blockchain to help manage our third-party (i.e., suppliers, shippers) relationships and execute transactions Building - we are piloting blockchain to help manage our third-party (i.e., suppliers, shippers) relationships, but we are not yet piloting to execute transactions Lacking - we have considered using blockchain, but are still learning to use it Absent - we don't use blockchain in our supply chain
  4. 4. Supply chain forensics: New insights on fraud, waste, and abuse Copyright © 2018 Deloitte Development LLC. All rights reserved. 4 What potential anti-fraud blockchain benefit would most improve your organization’s supply chain financial crime (e.g., fraud, waste and abuse) risk management efforts? Votes received in July 2018: 2,430 Don’t know / Not Applicable = 35.2% CNSR; 34% ER&I; 43.5% FSI; 40.4% GPS; 35.1% LSHC; 35.1% TMT; 38.2% Average 6.7% 5.1% 2.9% 14.8% 5.6% 3.4% 4.5% 13.5% 14.3% 17.6% 11.8% 6.3% 13.6% 14.4% 15.3% 16.6% 14.7% 10.1% 19.4% 17.0% 15.7% 26.5% 27.3% 31.1% 22.5% 25.7% 29.6% 25.3% Average CNSR ER&I FS GPS LSHC TMT Data encryption/information security Immutable register (i.e., transactions can't be manipulated in the register) Proof of identity safeguards Anti-Money Laundering enhancements
  5. 5. Supply chain forensics: New insights on fraud, waste, and abuse Copyright © 2018 Deloitte Development LLC. All rights reserved. 5 Has your company experienced fraud, waste, or abuse in its supply chain during the past 12 months? Findings over time Votes received: 3,056 (Feb. 2014); 2,596 (Feb. 2015); 3,115 (Jan. 2016); 3,185 (June 2017); 3,026 (July 2018) Don’t know / Not Applicable = 46.6% (Feb. 2014); 45.5% (Feb. 2015); 44.1% (Jan. 2016); 41.7% (June 2017); 41.5% (July 2018) 31.4% 28.9% 31.3% 31.6% 32.5% 22.0% 25.6% 24.6% 26.7% 26.0% Feb-14 Feb-15 Jan-16 Jun-17 Jul-18 Yes No
  6. 6. Supply chain forensics: New insights on fraud, waste, and abuse Copyright © 2018 Deloitte Development LLC. All rights reserved. 6 Who presents the largest supply chain fraud, waste and abuse risk for your organization? Votes received in July 2018 by industry: 3,017 Don’t know / Not Applicable = 31.4% CNSR; 25.8% ER&I; 41% FSI; 38.6% GPS; 29.2% LSHC; 37.4% TMT; 33.5% Average 28.7% 28.9% 32.1% 26.3% 26.7% 31.9% 26.0% 26.4% 29.0% 32.6% 19.5% 23.3% 28.0% 25.1% 11.4% 10.7% 9.5% 13.1% 11.4% 10.9% 11.5% Average CNSR ER&I FSI GPS LSHC TMT Project managers and invoice approvers Procurement Accounts Payable
  7. 7. Supply chain forensics: New insights on fraud, waste, and abuse Copyright © 2018 Deloitte Development LLC. All rights reserved. 7 Media contact Shelley Pfaendler Public Relations Deloitte Services LP spfaendler@deloitte.com Full press release available on Deloitte.com 8
  8. 8. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms. Copyright © 2018 Deloitte Development LLC. All rights reserved. The statements in this report reflect the aggregation of poll responses and are not intended to reflect facts or opinions of any entities. All data, charts and statistics referenced and presented, as well as the representations made and opinions expressed, unless specifically described otherwise, pertain only to the participants and their responses to the Deloitte poll. The information obtained during the poll was taken “as is” and was not validated or confirmed by Deloitte. This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation.

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