India Inc ill-prepared to handle frauds: Survey
The preparedness of India Inc. to address frauds is very low and retail financial sector, comprising banking, insurance and asset management companies, is most vulnerable to fraudulent activities, according to a survey conducted by consultancy firm KPMG.
The survey, which saw KPMG receive response from the top management of about 200 companies from diversified sectors, showed that just 24 per cent of the respondents had the relevant physical and logical access controls to tackle frauds.
Within the financial sector, 23 per cent of the respondents believed that banking, insurance, mutual funds and asset management companies were the most susceptible to frauds while 17 per cent believed that NBFCs/investment banks were more vulnerable to fraud risk.
The survey also brought out the increasing occurrence of frauds and its many forms within the information technology sphere, specifically in the BPO sector.
"Over the last few years, the frauds within the BPO sector have not only increased in occurrence but also managed to change its forms. The development of new threats has been faster than what BPO world could ever imagine or even come up with," KPMG India Executive Director and Head of Forensic Deepankar Sanwalka said.
Around 28 per cent of the respondents had witnessed a fraud committed by outsourcing vendors, KPMG said.
Expense accounts, with 23 per cent, figured on the top of the list when it came to the most critical and expensive type of fraud and was followed by false or incorrect information (17 per cent), personal use of official assets, forged documents and secret commission (13 per cent each).