Cyber breaches and insider threats are the fastest-growing risks, driving investment in Forensic Data Analytics (FDA), according to Mena executives.
According to EY’s 2016 Global FDA survey, “Shifting into high gear: mitigating risks and demonstrating returns,” the threats include malicious insiders stealing, manipulating, or destroying data.
Sixty-nine percent say that they need to do more to improve their anti-fraud procedures, including the use of FDA tools. Notably, this figure increased to 74% for the C-suite cohort. Of those respondents citing regulatory pressure as the reason to improve their procedures, C-suite respondents were found to be the most concerned as regulatory enforcement becomes more rigorous and widespread.
Mike Adlem, Mena fraud investigation and dispute services Leader at EY, said: “Cybercrime and insider threats are an everyday reality, posing a dynamic and relentless challenge. In Mena, 40% of businesses consider this risk to have increased; however globally more than 60% of businesses say the risk has increased. This may be due to lower awareness in Mena, as well as increasing regulatory pressures being applied in other regions.
“Businesses in Mena need to continue to raise risk awareness with management and prepare for the expected increased regulatory pressures that will be applied in the future. The use of FDA should form a critical component of risk management and compliance programmes and be applied in both a proactive and reactive manner.”
When looking at the current use of FDA tools to investigate incidents or manage risk, the survey found that internal fraud risk ranks highest for the application of FDA at 77%, and cyber breach, or insider threat risk ranks second at 70%.
With just 55% of respondents saying that their FDA spend is sufficient, a drop from 64% in EY’s 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.
When looking at the reasons for increased investment, the survey found that responding to growing cybercrime risks and increased regulatory scrutiny are the top drivers at 53% and 43%, respectively. How FDA tools are deployed is also changing, with 63% of respondents saying they invest at least half of their FDA budget on proactive monitoring activities.
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 cyber risks.
The rising maturity of corporate FDA efforts is also evident through the growing sophistication in their use of data. Seventy-five percent of respondents routinely analyse a wide range of structured and unstructured data, enabling them to gain a comprehensive view of their risk environment.
Paul Marsters, director, Mena Forensic Technology & Discovery Services at EY, said: “Given the level of pressure on fraud prevention that organisations in Mena are facing, it is no surprise that the majority of respondents are expending more effort on proactive initiatives.
“With technology becoming increasingly sophisticated, the opportunity to drive value from FDA efforts is improving. If the FDA plans are aligned with businesses investments in broader Data Analytics, then there is a great opportunity to raise FDA benefits case and awareness to executives.”
The survey was conducted with 665 executives globally across nine industry sectors, including financial services, life sciences, manufacturing, and power and utilities.