“Fraud – it’s a hot topic.” Not a very inspiring or original headline. At any time, and in almost any place, the anti-fraud agenda can be heard linked to global crises, national agendas, corporate imperatives or simply personal security – yes, it affects us all. The COVID-19 pandemic: fraud is on the rise. Increased use of digital tools: fraud is on the rise. Working from home: fraud is on the rise. What are we to make of this in reality? Surely there is some ‘numbing’ effect here. We become so used to hearing that there is a problem that the risk becomes a background consideration, or worse, the cost of fraud becomes an operational hazard rather than something we can really get our teeth into. This poses the obvious question: for all the technological development, advancement of systems, training programs, fraud awareness weeks, regulatory fines and the clear costs of these activities, how much fraud has actually been prevented, detected, or prosecuted above what might otherwise have been the case? How do you calculate the true ‘value’ of these activities to the individual, organisation, state or global agenda? This is a question that has plagued antifraud and indeed anti-financial crime1 practitioners and risk professionals for years. Consider also the same question of the prevention of money laundering, terrorism financing or proliferation financing often levied of financial institutions. The ever-repeated phrase ‘cost of compliance’ is balanced with the calculation of any reduction in actual criminal activity arising specifically from these preventive and detective activities. Whilst we cannot provide a quantified answer, we firmly believe that anti-fraud is a significant value-adding activity, and it starts at the organisational level. How are organisations moving to address this? In a previous article in this publication, our colleague Peter Glanville provided clarity on the new landscape of fraud investigation2 and the collaborative efforts of legal professionals and investigators. Investigation is a fundamental – and highly effective – tool in the prevention of fraud. It actively demonstrates zero tolerance 68 LAWYERMONTHLYDECEMBER 2022 Moving the Needle on Fraud Thought Leader Fraud is endemic to the working world, as the management of every organisation knows well. However, awareness of fraud and willingness to combat it do not lead to practicable change on their own, and many entities today are unknowingly vulnerable as a result. James Tebbs and Kassem Younes, Senior Managing Directors at Ankura, take an in-depth look at fraud prevention in this article, presenting an intuitive ‘cycle’ that any organisation can use to drive change in its resilience against fraud.
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