The biggest security risk to companies is their own employees, a report from risk consulting firm Kroll has concluded.
According to the US-based company, 77 percent of technology, media and telecoms (TMT) companies have experienced a fraud incident in the past year. Of these, 56 percent reported that junior employees played a “leading role” in the fraudulent activity.
The report, conducted by the Economist Intelligence Unit and commissioned by Kroll, surveyed 768 senior executives from the TMT industries from Europe, North America, Asia-Pac, Latin America and the Middle East and Africa.
Four in five respondents said their exposure to fraud had increased in the past year. Forty-one percent cited high staff turnover as the main driver for this, while 15 percent identified an increase in the volume of work being outsourced.
The most common type of fraud experienced in the sector was information theft, loss or attack, experienced by 32 percent of TMT companies surveyed by Kroll. This was followed by management conflict of interest (15 percent) and theft of physical assets or stock (15 percent).
Of those businesses to have suffered information theft, loss or attack and were able to identify the perpetrator, 36 percent said employee wrongdoing was behind it.
A third of TMT companies said they were looking to invest in employee screening in the coming year in an attempt to cut down fraud. However, Tommy Helsby, Chairman of Kroll, said that businesses need to address both external and internal vulnerabilities if they hoped to reduce the risk of fraud and other cyber attacks.
Helsby said: “Much media attention is focused on external threats to companies, highlighted by high profile cyber attacks, but the evidence revealed in our report and our day to day experience tells a different story. The respondents in this survey indicate the greatest single cause of fraud in their companies is their own employees.”
Helsby warned that fraud remained “a serious business threat that cannot be completely eliminated.”
He added: “Fraud is not going away and continues to be on the rise, but the well prepared business can do much to stay one step ahead and be positioned to eliminate or mitigate it.”