More than 26 per cent of Indian organisations surveyed by PwC lost over $1 million due to platform fraud, with 99 per cent of the frauds occurring in the past 24 months on financial, social media, goods, enterprises, media sharing, knowledge sharing, and services platforms.
Platform fraud is a form of economic crime perpetrated on social media, e-commerce, enterprise, and fintech platforms.
Economic crime continues to be a significant challenge for Indian companies, with 66 per cent of organisations surveyed experiencing at least one form of it in the past two years, as per the first edition of the report.
Moreover, PwC’s report states that the surge in remote work, e-commerce, delivery applications, and contactless payments has further contributed to the rise of this type of fraud; in fact, 57 per cent of all fraud incidents in the country were platform fraud. When it comes to motive, financial gain accounted for 44 per cent, brand damage 32 per cent, and competitive advantage 21 per cent.
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“On average, an Indian company operates on five different platforms as part of its regular business activities today. The emergence and surge in e-commerce, contactless payments, home delivery, and more have opened avenues of entry for fraudsters. Organisations need to be cognizant of these evolving threats and adequately invest in fraud prevention and detection strategies to safeguard themselves,” said Puneet Garkhel, Partner and Leader, Forensics Services, PwC India.
According to the report, enterprise platforms are a prime target for malware, phishing, money laundering, and ransomware. Financial frauds on transactions made to or from platforms accounted for 89 per cent of all platform frauds. These frauds vary from basic unauthorised digital purchases to more complex identity theft and triangulation fraud.
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Further, payment fraud, particularly through credit cards and digital wallets, accounted for 92 per cent of all customer frauds in India. Customers also face other types of fraud such as impersonation, authorised push payments, and application or lending fraud.
The report suggests thatleaders within an organisation should take charge of the risk management programme, especially in situations where a new threat could significantly disrupt the business .“Risk leaders should design a strategy for identifying, assessing, and responding to fraud. This includes implementing a monitoring programme to detect anomalies and being aware of spikes in an online activity or negative media coverage.”
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The second edition of PwC’s Global Economic Crime and Fraud Survey 2022: India Insights is titled “Platforms: The new frontier of fraud in India”. PwC surveyed 111 organisations across India across industries including technology, financial services, banking and capital markets, consumer products and retail, education, healthcare, hospitality and leisure, and industrial products and manufacturing.