Sub-Saharan Africa has the third highest exposure to cyber fraud incidents in the world, a new report says.
The Global Fraud Report by a leading risk management and investigations firm, Kroll, says people in lower employment cadre in the region are the most common perpetrators of fraud.
They are followed by freelance and temporary staff.
In 2016, Kroll commissioned Forrester Consulting to conduct 10 indepth interviews and an additional online survey with 545 senior executives worldwide across multiple industries and geographies. The survey was fielded through July and August 2016.
The respondents represented all major global geographies and they include Asia- Pacific region, North America, the Middle East/Africa, Sub-Saharan Africa and Latin America.
In the report, 89 per cent of the respondents in sub-Saharan Africa admitted experiencing at least one type of fraud in the past year- seven percentage points above the global average and five percentage points higher than in 2015.
Executives in the region also reported the highest incidence of internal financial fraud (31%), 11 percentage points higher than the global average of 20%. In addition they also experienced a higher than average incidence of information theft or loss.
Security incidents affected more respondents in the region, at six percentage points above the global average of 68%.
The most common incidents were theft or loss of intellectual property (IP) (43%) and workplace violence (26%).
Theft or loss of IP weighs heavily as a concern and was mentioned as a vulnerability by a greater percentage of respondents in the region (28%) than any other region or country surveyed.
The report also noted that the most frequently mentioned anti-fraud measure in the region was to engage the board of directors with the development of cyber security policies and procedures.
Respondents in Sub-Saharan Africa also reported the third highest exposure to cyber incidents (91%). Data deletion due to system issues was reported as the top form of attack by over a third of respondents in the region.
Other forms of attack, such as virus and worm infestations and email-based phishing attacks, were in line with the global averages. The greatest anomaly was in wire transfer fraud, which was at the highest level in the survey (26%) and nearly twice the global average of 14%.
Other findings from the sub-Saharan Africa region include:
1.Ex-employees were most likely to be responsible for a cyber incident, reported by 22% of participants.
2.Customer and employee records along with trade secrets were almost equally likely to be reported as the target of cyber attacks.
3. In the event of an attack, only 22% of participants said they would contact their IT service vendor first, while almost as many (16%) said they would contact an incident response firm.
The next most common anti-fraud measures were information security and staff background screening, both adopted by 70 per cent of respondents in the region. However, these mitigation strategies had been adopted by fewer respondents in Sub-Saharan Africa than in the rest of the world on average.
Tommy Helsby, Co-Chairman, Kroll Investigations & Disputes, commented: “This year’s Kroll Global Fraud and Risk Report shows that it’s becoming an increasingly risky world, with the largest ever proportion of companies reporting fraud and similarly high levels of cyber and security breaches. The impact of such incidents is significant, with punitive effects on company revenues, business continuity, corporate reputation, customer satisfaction, and employee morale.”
“With fraud, cyber, and security incidents becoming the new normal for companies all over the world, it’s clear that organizations need to have systemic processes in place to prevent, detect, and respond to these risks if they are to avoid reputational and financial damage.”
Sub-Saharan Africa is the only region surveyed where regulators were reported to significantly contribute to fraudulent activities, as they were named in over a fifth (23%) of all frauds reported.