Watch out for cybercrime, says PWC

KUALA LUMPUR: Cybercrime will likely emerge as "the most popular" type of economic crime in Malaysia as more IT-related transactions are made in the future, according to the 2014 Global Economic Crime Survey by PricewaterhouseCoopers (PWC).
"Financial services sector, in particular, has the biggest risk to cybercrime, with individuals as the primary victim and financial institution the secondary victim as a result of phishing attacks," PWC executive director Alex Tan told a press conference here yesterday.
Some 5,128 respondents from 99 countries, of which 110 were Malaysians, participated in the survey.
Key findings include that 31% local respondents have experienced cybercrime, a significant jump from 5% in 2011, with 40% saying their perception of cybercrime risk at their organization increased.
Tan said as Malaysia has evolved into the advanced technology era, it becomes more "attractive" for cybercrime.
He said that cybercrime can happen internally and externally, therefore more awareness of it should be raised.
"For internal cybercrime, it can be copying a large amount of company data to competitors, and for external cybercrime, it can be through the payment system, which is becoming more sophisticated," said Tan, adding that this situation could easily happen as e-payment is widely promoted to replace the use of cheques.
According to the survey, asset misappropriation topped the list of economic crime reported, with 65% respondents saying they had suffered from this form of economic crime, followed by cybercrime (31%). Procurement fraud and bribery and corruption were at 19% respectively.
Tan said chances of asset misappropriation are high especially for those companies that have more than 1,000 employees.
"For our survey, it shows that they're (the employees) taking assets and money from the company, and it has become a global trend," he said.
A notable figure is that 9% of respondents have suffered financial losses of more than US$1 million (RM3.27 million).
Tan also quoted the US-based Association of Certified Fraud Examiners as saying that about 5% of revenue are lost to fraud annually.
The survey shows that 58% respondent said the frequency and size of economic crimes have increased and 38% believe they will likely experience corruption.
When asked on the breakdown of government and private sector in procurement fraud, Tan said that most of the cases were at the junior management level irregardless.
Vendor selection (50%) is the main procurement cycle where fraud occurred, while the rest are invitation of quotes/bid process, vendor contracting/maintenance and payment process with 33% each.
Tan said that Malaysian businesses are still underestimating the severity and threat of fraud, corruption and other forms of economic crime, with 47% respondents saying they have not undertaken a fraud risk assessment in the past two years.
Overall, he said the fraud situation in Malaysia can be improved. They still need to strengthen their fraud risk assessment and whistleblower hotline.