Sharp surge in frauds post-pandemic; Grant Thornton Bharat report

As the Covid-19 pandemic changed the way organisations function, it also exposed them to financial fraud. Shift from onsite to remote work, lack of internal controls, and inadequate fraud awareness have resulted in a surge in fraud, according to a Grant Thornton Bharat report.

“About 71 per cent of organisations have reported business email compromise, 65 per cent experienced social engineering attacks, and 54 p.er cent faced identity theft,” Grant Thornton Bharat’s latest ‘Financial & Cyber Fraud Survey said.

While the pandemic has accelerated technology adoption, limited investments in governance protocols are a key contributing factor to the increased cyber fraud incidents across industries that can exploit the vulnerabilities in internet-connected systems.

The frauds cost organisations heavily. One-fourth of the organisations surveyed have suffered losses of ₹1 crore and above, with three-fourths of such organisations facing financial damages exceeding ₹5 crore.

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The most affected industries include technology, media, and telecommunications (58 per cent), financial services (51 per cent), and manufacturing (46 per cent).

The frauds are varied. They include cyber, diversion of assets, and regulatory. Nearly half of the respondents attributed this rise in fraudulent activities to the shift from onsite to remote work environments and the subsequent lack of stringent internal controls.

“Cyber incidents account for 64 per cent of these frauds, underscoring businesses’ critical vulnerabilities as they navigate increasingly digital landscapes,” it said.

The good news is that organisations are alive to the challenge. “As many as 60 per cent of companies are now prioritising cybersecurity and anti-fraud technologies on their strategic agenda,” Samir Paranjpe, Partner, Grant Thornton Bharat, said.

Regulatory frauds

A good number of organisations have also reported fraud related to regulations and compliance. The third biggest area of concern noted is that of regulatory fraud and non-compliance. Bribery and corruption, along with money laundering, represent severe forms of regulatory fraud that undermine the industry’s integrity.

“India Inc is now prioritising adopting anti-fraud technology and cybersecurity in response to preempt the attacks,” Vishesh C Chandiok, CEO of Grant Thornton Bharat, said.

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