EY’s 2016 Global Forensic Data Analytics Survey, Shifting into high gear: mitigating risks and demonstrating returns suggests that rising risks around cybercrime, internal fraud, and bribery and corruption have been key concerns for Indian organisations over the past two years. The India findings of the survey state that these risks are leading to increased investment in forensic data analytics (FDA) – 75 per cent of the respondents agreed to deploying FDA tools when investigating incidents and/or monitoring risks around bribery and corruption risks and 65 per cent around cyber breaches. The key benefits of using FDA include early detection of fraud and increased business transparency.
Arpinder Singh, Partner and National Leader, Fraud Investigation & Dispute Services, EY, said, “Cybercrime is perceived as the fastest growing fraud risk, followed by bribery and corruption in India. Eighty per cent of the respondents stated that management’s awareness of the benefits of FDA in the company’s anti-fraud programme needs to improve. It was noted that organisational reluctance to invest significantly in FDA is partly due to lack of management buy-in around its potential return on investment. However, we see that FDA has emerged as a critical component that can have a significant impact on growing threats such as internal fraud, cybercrime, corruption, money laundering, etc. and companies need to proactively intertwine it within their anti-fraud programmes.”
The survey conducted by EY’s Fraud Investigation & Dispute Services practice revealed that businesses need to cope with a host of reforms driven by both, risk factors and regulations. This has augmented the scope of risk aversion and detection that the company board and the senior management need to implement internally.
Mukul Shrivastava, Partner, Fraud Investigation & Dispute Services, EY, said, “The risks faced by organisations on account of cybercrime are ever increasing. However, organisations continue to be reactive and use FDA tools just for investigations. They need to switch tracks and use FDA techniques to proactively counter such risks. Using FDA, organisations can effectively analyse their internal data sets (network traffic, emails, logs, etc.) to identify threats based on historic data, learn and then improve their IT systems and controls.”
Anil Kona, Partner, Fraud Investigation & Dispute Services, EY, said, “Organisations have started realising the benefits of proactive forensic data analytics to identify fraud. With the cases of fraud increasing alarmingly, we can leverage the power of forensic data analytics for continuous monitoring, insider threat management, early warning alert generation, etc. to detect frauds very early and prevent them in most cases.”
With just 55 per cent of the global respondents saying that their FDA spend is sufficient, a drop from 64 per cent in our 2014 survey, it is no surprise that three out of five say that they plan to spend more on FDA in the next two years. In India, 66 per cent of respondents are spending at least half their FDA budget proactively, which is higher than global. We believe this proactive stance is a result of greater regulatory enforcement concerns as well as improved surveillance analytics and compliance monitoring offerings in the market.
In response to these increased risks, the use of advanced FDA is becoming mainstream, with new technologies and surveillance monitoring techniques widely used to help companies manage current and emerging fraud and cybercrime risks. The rising maturity of corporate FDA efforts is also evident through the growing sophistication in their use of data. Globally, 75 per cent of respondents routinely analyse a wide range of structured and unstructured data, enabling them to gain a comprehensive view of their risk environment.