Approximately half of respondents in Vietnam have suffered economic crime/fraud and almost half of the Vietnamese respondents said they had been targeted by cybercrime in the previous two years.
For the first-time ever, PwC has launched a Vietnamese economic crime report based on the format ofits biennial Global Economic Crime and Fraud Survey.
The 2018 Vietnamese survey indicates 52% of companies in Vietnam experienced fraud during the last two years, slightly higher than the rates in the Asia-Pacific region(46%) and at the global level (49%); 40% of respondents indicated they had not experienced any fraud.
The most common types of economic crime reported by Vietnamese respondents wereAsset Misappropriation (experienced by 40% of respondents) and Bribery and Corruption (36%). Fraud committed by consumers (33%) and business misconduct (29%) followed closely behind.
PwC’s Vietnam survey indicatesthe majority (53%) of fraud is perpetrated by internal actors, with middle and junior management staff committing a combined total of 61% of the economic crimes. By contrast, the percentage of reported economic crimes that are blamed on external actors (including customers, vendors, agents, hackers, etc.) is 36%.
Damages from economic crimes can be classified into financial and non-financial. In terms of financial impact, 53% of Vietnamese companies in our survey reported losses of less than $100,000 (approximately VND2.3 billion) as a result of economic crimes over the last two years. Just under onethird of the respondents (32%) estimated they lost more than $100,000 to fraud in the same period.
Among the non-financial impacts, the most severe threat the Vietnamese survey respondents identified was to their reputation/brand strength (28%). This was followed by employee morale and business relations, where 23% and 21% of respondents, respectively felt the greatest impact.
Commenting on the varying impacts of fraud, Marcus Paciocco, Director of Forensics Services at PwC Consulting Vietnam said:
“There are several types of quantifiable financial damages from fraud, including remediation costs, legal fees, actual monetary losses, and even criminal penalties. However, even though the non-financial damages may not be quantifiable, they can lead to potentially worse consequences than financial loss for the fraud victims, such as irreversible damage to their organisation’s reputation and employee morale.”
On a more positive note, companies in Vietnam have purportedly undertaken fraud risk assessments regularly during the past two years, with just under half of the respondents advisingthey hadperformed such an assessment (46%).However, fewer respondents have performed assessments that focused on specific risk areas, such as Anti-Bribery and Corruption (35%) or Cyber-attacks (29%).
Advancements in digital technology are reshaping how businesses operate both locally and on a global scale. As one might expect, economic criminals and fraudsters are also using technology to enable crimes. In fact, almost half of the surveyed respondents (47%) advised they had been targeted by cybercrime in the past two years, with the most common methods being malware and phishing.
To counter cyber-attacks, many organisations possess a cyber-incident response plan. However, 37% of the Vietnamese respondents said that they: a) did not know whether they had a cybersecurity programme or not (16%); b) did not have such a programme (13%); or c) were only now assessing the feasibility of implementing such a programme (8%).