Marco Sebastian - Pricewater Consulting - The Biggest Competitor You Didn't Know You Had
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JBN Session on 16th August 2018 at Financial Club Jakarta - Sampan Ambarita. Please use this presentation material for reference purposes only.
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Marco Sebastian - Pricewater Consulting - The Biggest Competitor You Didn't Know You Had
- 1. PwC's Global Economic Crime Survey 2018 – Pulling Fraud out of the Shadows The Biggest Competitor You Didn’t Know You Had 19.04.18 www.pwc.com/id/en/services/consulting/forensics Strictly private and confidential
- 2. 2 Pulling the biggest competitor you didn’t know you had out of the shadows In PwC’s Global Economic Crime and Fraud Survey, only 49% of global organisations said they’d been a victim of fraud and economic crime. However, we know that this number should be much higher. So, what about the other 51%?
- 4. 7,228respondents from 123territories participated 52% of respondents were Senior Executives of their respective organizations 42% represented publicly-listed companies 55% were from organizations with more than 1,000employees 97 respondents are from Indonesia About the Survey 4
- 5. PwC Digital Services PwC Consulting – Forensic Services - Video 5
- 7. PwC Digital Services The Reported Rate Of Economic Crime is on the Rise 7 Has you organization experienced any fraud and/or economic crime within the last 24 months? Global 2018 Indonesia 2018 49% “ ”
- 8. PwC Digital Services 8 49% Has you organization experienced any fraud and/or economic crime within the last 24 months? Indonesia 2018 Global 2018 Global 2016 The Reported Rate of Economic Crime Has Increased Across All Territories “ ”
- 9. PwC Digital Services Fraud Comes in Many Different Forms and Shapes 9 40% 35% 31% 29% 27% 21% 21% 28% 20% 45% 25% 22% 31% 29% Business Conduct/Misconduct Accounting Fraud Asset Misappropriation Bribery and Corruption Procurement Fraud Cybercrime Consumer Fraud Global Indonesia What types of fraud and/or economic crime has your organization experienced within the last 24 months?“ “
- 10. PwC Digital Services Paying Bribes has Significant Consequences, as Well as Opportunity Losses 10 In the last 24 months, has your organization been asked to pay a bribe/lost an opportunity to competitor which you believe paid a bribe? “ 30% 14% 47% 17% 11% 10% 10% 8% 38% 38% 41% 50% 28% 39% 10% 27% Indonesia - Lost an Opportunity to a Competitor Which You Believe Paid a Bribe Global - Lost an Opportunity to a Competitor Which You Believe Paid a Bribe Indonesia - Been Asked to Pay a Bribe Global - Been Asked to Pay a Bribe Yes, in the country we primarily work in Yes, globally No Don't Know “
- 11. PwC Digital Services 11 Of the fraud and/or economic crimes experienced by your organization in the last 24 months, which was the most disruptive/serious in terms of the impact on your organization (monetary or otherwise)? “ Business (Mis)Conduct 23% 9% Accounting Fraud 19% 7% Asset Misappropriation 15% 21% Bribery and Corruption 10% 10% Procurement Fraud 6% 9% Consumer Fraud 6% 15% Cybercrime 4% 15% Global Indonesia Fraud and/or Economic Crimes with the Most Disruptive Impact “
- 12. PwC Digital Services 12 What was the level of impact of the most disruptive crime experienced on the aspects of your business operations?“ *medium and high levelGlobal Indonesia Fraud and Economic Crime Impact All Elements of Business both globally and in Indonesia “ 58%/38% Business Relations 62%/48% Employee Morale 54%/36% Reputation / Brand Strength 51%/30% Regulations with Regulators . 40%/16% Share Price .
- 13. PwC Digital Services Internal Actors are the Main Fraud Perpetrators 13 64% 29% 0% 7% 52% 40% 4% 5% Internal Actor External Actor Don't Know Prefer Not to Say Indonesia Global Who was the main perpetrator of the fraud? “ “
- 14. PwC Digital Services The Fraud Triangle: what makes an employee commit fraud? 14 Rationalization Opportunity Rationalization Incentive/Pressure to Perform 7% 45%45% 11% 21% 59% OpportunityIncentive/Pressure to Perform “ Global Indonesia To what extend did each of the following factors contribute to the incident or fraud and/or economic crime within your organization committed by internal actors? Fraud Risk Fraud Risk ”
- 15. PwC Digital Services Corporate Controls Do Not Detect All Fraud 15 How was the incident of the most disruptive fraud and/or economic crime that your organization experienced initially detected? “ 31% 7% 7% 0% 13% 2% 13% 14% 13% 13% 13% 7% 7% 8% Internal Audit Fraud Risk Management Suspicious Activity Monitoring Tip-off (Internal) Tip-off (External) Whistleblowing Hotline By Accident Global Indonesia ” Corporate Controls Corporate Culture Beyond Mgt Control
- 16. PwC Digital Services There are Various Reasons to Conduct a Risk Assessment 16 What prompted your organization to performs the risk assessment(s)? “ 4% 6% 57% 51% Annual or routine process As part of an audit plan As part of Enterprise Risk Management (ERM) Strategy 56% 60% 47% 47% Driven by specific event 1% 2% Don’t know Indonesia Global “
- 17. PwC Digital Services Indonesia Scores Low on Cyber Risk Assessment Compared to Global 17 56% 39% 27% 19% 17% 35% 20% 15% 54% 33% 19% 23% 16% 46% 30% 10% General Fraud Risk Assessment Anti-Bribery and Corruption Sanctions and Export Controls AML Anti-Competitive/Anti-Trust Cyber-Attack Vulnerability Cyber Response Plan No Risk Assessments Performed In the last 24 months, has your organization performed risk assessment on any of the following areas?“ Global Indonesia ”
- 18. PwC Digital Services Compliance with AML Regulations 18 9% 2% 34% 18% 36% 8% 6% 53% 7% 26% Don't know No Yes, subject to both local and international AML regulations Yes, only other countries AML regulations Yes, only local AML regulations Indonesia Global Is your business subject to AML regulations? “ ”
- 19. PwC Digital Services Indonesia is Currently under Review for Anti-Money Laundering Regulatory Compliance 19 Has your organization experienced any regulatory enforcement/inspection in relation to AML in the last 24 months? “ Don't know 5% 14% No, we have not had a regulatory inspection in the last 24 months 27% 31% Yes, we had a regulatory inspection with no major feedback/consequences 14% 23% Yes, we had a regulatory inspection and received major feedback to address 23% 15% Yes, we were/are currently under enforced remediation program 32% 17% Global Indonesia ”
- 20. PwC Digital Services 41% Says that it Does Not Have a Fully Working Cyber Security Program in Indonesia 20 Does your organization have a Cyber Security Program (preventive/detective) to deal with cyber-attacks?“ Yes, but it has not as yet been implemented Yes, this plan is fully in operation 59% 53% Global Indonesia 18% 12% 13% No, but we are currently assessing the feasibility of implementing such a plan 10% 13% No, we do not have a plan 9% 10% ” Don’t know 6% 10%
- 21. PwC Digital Services Four Steps to Fight Bribery and Corruption Recognize fraud when you see it Take a dynamic approach Harness the protective power of technology Invest in people, not just machines 21
- 22. PwC Digital Services Recognize Fraud When You See It 22
- 23. PwC Digital Services The Reported Rate Of Economic Crime is on the Rise 23 Has you organization experienced any fraud and/or economic crime within the last 24 months? Global 2018 Indonesia 2018 49% “ ”
- 24. PwC Digital Services The Reported Rate of Economic Crime Has Increased Across All Territories 24 49% Has you organization experienced any fraud and/or economic crime within the last 24 months? Indonesia 2018 Global 2018 Global 2016 “ ”
- 25. PwC Digital Services Organisations Continue to Increase Spending on Combatting Fraud in the next 24 months 25 14%13% Significant increase 28%31% Some increase 43%51% About the same level 15%6% Decrease Indonesia Global
- 26. PwC Digital Services Take a Dynamic Approach 26
- 27. PwC Digital Services Tone at the Top is Critical 27 Global Indonesia 91% 5% 4% 94% 4% 2% Yes No Don’t know Yes No Don’t know
- 28. PwC Digital Services Harness the Protective Power of Technology 28
- 29. PwC Digital Services Use of Technologies in Combatting Fraud 29
- 30. PwC Digital Services Invest In People, Not Just Machines 30
- 31. PwC Digital Services The Fraud Triangle: what makes an employee commit fraud? 31 Rationalization Opportunity Rationalization Incentive/Pressure to Perform 7% 45%45% 11% 21% 59% OpportunityIncentive/Pressure to Perform “ Global Indonesia To what extend did each of the following factors contribute to the incident or fraud and/or economic crime within your organization committed by internal actors? ” Fraud Risk Fraud Risk
- 32. PwC Digital Services Hallmarks of Effective Anti-bribery and Corruption Compliance Program 32 Risk Assessment Tone from the Top Resources Third-Party Due Diligence Training & Communicatio n Reporting and Investigation Continuous Monitoring Incentives and Disciplinary Anti- Corruption Policies
- 33. PwC Digital Services Thank You © 2018 PwC. All rights reserved. Not for further distribution without the permission of PwC. “PwC” refers to the network of member firms of PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network. Each member firm is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way. No member firm is responsible or liable for the acts or omissions of any other member firm nor can it control the exercise of another member firm’s professional judgment or bind another member firm or PwCIL in any way. 33