Fraud and cyber-crime set to increase threefold following dramatic EU referendum decision
As the dust settles today on what has been somewhat of a surprise, we consider how Brexit is likely to have an impact on fraud and cyber-crime for businesses in the coming months.
We’ve all seen the effect that Brexit has had upon the financial market this morning and this inevitably stirs up fears of another recession. Indeed, many businesses will wake up this morning to the reality of how Brexit will impact upon their sales revenues, profit margins and future trading opportunities. But what should also be considered, is how fraud could increase in this new, uncertain world.
In the previous recession, we saw a dramatic increase in company managers, employees and customers committing fraud. In fact, the amount of business related fraud went up threefold, accounting for billions in lost revenue. Businesses are always at risk of fraud, but such uncertainty increases the risk further, and so companies need comprehensive measures in place to ensure they are responding effectively to threats, many of which are unknown at this stage.
With 49% of all businesses being affected by fraud and cyber-crime each year, businesses always need to keep one eye on managing business risk and today’s events should merely act as a reminder to ensure they have the necessary training, procedures and policies in place to reduce the increased risk.
Why will Brexit increase business fraud?
Some people argue that the reason fraud increases during periods of uncertainty, is that pressure on jobs, margins and revenues means that employees are more likely to report fraud. This means that fraud may not be increasing in terms of instances, but it is being reported more. Such financial uncertainty has previously been shown to empower employees to no longer turn a blind eye to other’s fraudulent activities of their colleagues within a business. Employees nervous about the sustainability of their own roles can find themselves thinking “I’m not going to look the other way, because if the business is struggling, then I might lose my job”. It follows, therefore, that now is not only a great time to reassure your workforce that it has a bright future, but to communicate a message showing that you are taking measures to protect the business against fraud going forward and provide them with a means to report fraud should it occur.
Check your fraud and cyber-crime prevention measures
Take a few minutes out of your day to get to grips with your current fraud and cyber-crime prevention measures. Do you effectively communicate your stance to your employees? Do you facilitate confidential whistle blowing reports? Do you have strict IT and password policies? Crucially, are you training your staff on the likely increased fraud they may be subjected to from phishing emails, fake invoices and other sources of fraud and cyber-crime?
If you’d like help to establish your risk profile, we provide a free business vulnerability assessment. Simply get in touch via 0800 772 0878 or firstname.lastname@example.org.