Economic Crimes Fall Across Middle East

A new survey shows that only 21% of organizations across the Middle East reported financial or economic fraud, compared to more than 37% globally.

The survey showed as well, that the trend for the future is alarming as over 38% of respondents located in the Middle East said they were expecting their organization to suffer economic crime of some sort during the upcoming 24 months.

Economic crime across the Middle East continues to remain a significant threat, which is affecting both small and large businesses.

Every company or industry in the area is susceptible to fraud’s impact. Looking ahead, CEOs as well as executive management say they are concerned a great deal over the risks involved in cybercrime and that corruption and bribery remains a strong threat.

A large number of financial institutions including two regional one such as Rakbank based in the UAE and Bank Muscat in Oman suffered large losses during 2012 when cyber crime by a global syndicate stole more than $45 million through hacking into the processing firms for credit cards and withdrawing money at cash machines (ATMS) in over 27 countries.

Bankers announced that during the course of the past two years there had been a drop in banking fraud across the UAE.

The new survey showed the economic crime that was most common in the Middle East was misappropriation of assets, which 71% of the respondents who had reported some fraud. That was followed by 37% saying cybercrime, corruption and bribery 35% and fraud through accounting 35%.

The survey showed a large source of fraud related to the poor integrity of employees. Sixty-three percent of the economic crime that is committed is done by an insider, with only 27% of the fraud by persons external to the company hit by the fraud.

The amount of the cybercrime reported reflects how the evolving technologies are constantly creating more chances for criminals that are technologically sophisticated.

The direct impact financially on businesses because of these economic crimes remains quite high with more than 12% of respondents indicating that their financial impact had been as high as $5 million during the last 2 years. Half of the respondents reported they suffered losses of more than $100 million.

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