Procurement Fraud Statistics 2023 — 18 Key Figures
Procurement fraud statistics allow you to know how often companies still lose money through fraudulent acts in procurement in 2023. However, what are these statistics?
In this article, we will show you the figures regarding procurement fraud in 2023. We will also show you some of the factors why people commit fraudulent acts in procurement nowadays.
Once you finish reading this article, you will know the latest statistics about procurement fraud. Thus, it will allow you to know what to do in order for you to avoid procurement fraud in your profession or your company.
Cyber-enabled Economic Crime
As many things become digitized, many people are also taking advantage of this through cybercrime. Cybercrime stood out among 19 categories of economic crime as the most infamous and disruptive experience over the past two years around the world.
In the United States, about 22% of respondents surveyed by PwC experienced cybercrime for the first time which is a result of disruption from the pandemic and responses to it, including the quick shifting of all things into digital.
Therefore, companies need to find new ways to connect disjointed departments and identify risk scenarios across various functions. Cyber frauds and threats are usually handled by different departments that do not work or communicate with one another about risks, which cyber criminals know.
Procurement Fraud Increased Significantly During COVID-19
Social instability and economic downturn can pave the way for fraud and financial crimes. This was seen during the pandemic which many organizations have encountered.
Remoted work lowered the risks of asset misappropriation. However, it increased digital security issues.
Physically attacking employees or blackmailing has become the new concern as companies allow access to corporate data from the comfort of their employees’ homes. Thus, companies need to increase their awareness of this emerging risk.
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External Threats on The Rise
A survey by PwC has found a disturbing trend among fraud and economic crimes in 2022. External entities that cannot be easily influenced or controlled are becoming stronger now.
The biggest problem with external threats or fraudsters is that they are immune to traditional fraud prevention tools such as training, code of conduct, and investigations which forced companies to seek legal action.
For years, the main focus of fraud and theft in businesses was internal. However, due to the trend in external threats, companies may have to shift their focus to consider external threats as well.
New Threats to Become a Bigger Concern in The Future
Although consumer fraud and cybercrime remain worrisome to businesses, new threats are now getting enough attention and can become a bigger problem in the future.
Other emerging threats include environmental, social, and governance (ESG) fraud and supply chain fraud. The number of frauds is increasing in the coming years as sustainability becomes an essential global concept and supply chain disruptions continue to hurt international trade.
18 Procurement Fraud Statistical FiguresThat You Should Know
1. It is anticipated that digital fraud losses will surpass $348 billion globally between 2023 and 2027.
2. An increase in the frequency of cyberattacks and frauds is driving the growth of the fraud detection and prevention market.
3. It is expected that the Fraud Analytics Software Market will grow at a CAGR of 8% during the period of 2023 to 2030.
4. In 2023, many fraudsters will utilize synthetic identities to create online shopper profiles that can outsmart retailers’ fraud controls.
5. The Association of Certified Fraud Examiners (ACFE) estimates that occupational fraud will cost businesses more than $4.7 trillion worldwide each year.
6. A report by ACFE has revealed that 97% or more of fraud examiners consider analytics to be an indispensable tool in increasing the efficiency of their fraud detection programs.
7. According to the conservative industry, at least 10% of all insurance claims are estimated to contain some fraud.
8. Technological advancement is a key trend gaining popularity in the fraud detection and prevention market.
9. In 2023, increasing fraud losses and a drive towards automation will motivate centralized governance over many scattered solutions and consolidation of decision capabilities at onboarding and throughout the customer lifecycle.
10. There will be a continued focus on artificial intelligence and machine learning in the fight against fraud in 2023.
11. Juniper Research estimates that e-commerce merchants worldwide will lose $48 billion in 2023.
12. According to Juniper Research, Western Europe will make up 26% of global fraud losses, followed by Asia at 22%.
13. Over 51% of PWC’s surveyed organizations say they have experienced fraud in the past 2 years.
14. Nearly half of the 31% of energy, utilities, and resources (EU&R) has experienced procurement fraud.
15. Cybercrime will continue to be the most disruptive fraud in 2023.
16. 1 out of 8 organizations experienced new incidents of supply chain fraud due to the disruption caused by COVID-19.
17. Threats from hackers and organized crime have risen in the past 2 years.
18. The top concealment method used by fraudsters is through the creation of fraudulent physical documents which is at 39% of all the cases studied.
Frequentlyasked questions
+ What is procurement fraud?
It is defined as illegal acts that intend to manipulate the procurement process.
+ Why does procurement fraud happen?
There are three main reasons why employees commit procurement fraud:1.) financial instability; 2.) there is an opportunity for fraud; 3.) poorly compensated.
+ What is cybercrime?
It is a criminal activity that is carried out by means of a computer, networked device, or network.
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