Slowdown In Global Economy Accompanied By Spike In White-Collar Crime Globally

A report based on a survey done by data company Refinitiv found that there has been an increase in the white-collar crimes such as fraud and money laundering because of an economic slowdown globally.

Refinitiv said that over the last 12 months to the end of March 2019, about 75 per cent of the respondent firms in Asia-Pacific had been prey to such crimes compared to 49 per cent of companies in a survey done a year ago. In the same period globally, 72 per cent of the companies polled were victims of white-collar crime compared to just 47 per cent in the year earlier.

This is the second year that such a survey was conducted by Refinitiv. The survey was responded to by 3,138 large companies each of which had an average annual turnover of at least $33 billion. The survey was conducted in March of this year in 24 markets worldwide which included markets of Hong Kong, China, the United States and the United Kingdom.

There has been a loss of $1.45 trillion in aggregate turnover because of the costs to companies due to the white-collar crimes and the costs arising because of measures taken to avoid it which included indirect costs of not doing business with certain companies and customers due to suspicious deals.

Even though many companies participating in the survey were aware of the threats posed by such crimes, not enough measures to protect themselves had been taken by the companies, said Neil Pabari, head of North Asia at Refinitiv.

Due diligence on their suppliers or business partners was conducted by about 51 per cent of companies globally, he said, and added that he expected the condition to get better because many of the companies that had been polled by the firm informed that they have increased investments in technology on order to better their internal controls.

Compared to 3.1 per cent last year on the average, about 4 per cent of their turnover was spent by companies to safeguard crime this year.

“About 97 per cent of the respondents believe technology can significantly help with financial crime prevention, but only 44 per cent of them are already using artificial intelligence to identify their customers, or other due diligence. Companies should introduce more technology to prevent losses from fraud and other crime,” Pabari said.

The most receptive companies were found in Mainland China where about 82 per cent companies there were making plans for investing more on digitisation and automation so that white collar crimes can be prevented. In contrast, plans for increase of investments for this purpose were made by only about 54 per cent of Australian companies.

“Financial regulators worldwide need to invest more in technology to crack down on criminals who are now using the internet and other new technology to carry out fraud and other crimes,” said Roy Lo Wa-kei, managing partner of accounting firm ShineWing Hong Kong.

White collar crimes have seen a boost because of a global economic downturn, Lo said.

“Some companies that have not earned enough to cover their expenses or repay debt, may try to use false documents or other methods to cover this up. Individuals who are struggling financially may also be tempted to accept a bribe or commit fraud.”

(Adapted from

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