Economic crime a threat to South Africa’s organisations (Supplied Content)

According to the press release issued by PwC on 27 February 2018, economic crime in South Africa is now at the highest level over the past decade. It is also alarming to note that 6% of executives in South Africa (Africa 5% and global 7%) simply did not know whether they were being affected by economic crime or not. Although other South African organisations continue to report high levels of economic crime others are still not paying attention of the effect this type of crime can have on their finances until it happens to them.

Economic crime is often mistaken for corruption but these are two different terms.  Corruption is a criminal act by those in power, typically involving bribery while economic crime is not limited to both the public and private space. It can refer to acts such as money laundering, tax evasions, illicit capital heavens and banks etc. It is of significance that companies start to look for alternative solutions on they can avoid such malpractises within their organisations. Not only does economic crime result in the financial loss in an organisation, it can have dire effects on the staff morale, commercial relations and most importantly its reputation.

Trevor White PwC Partner, Forensic services and South Africa Survey Leader, says: “Economic crime continues to disrupt business with this year’s results showing a steep incline in reported instances of economic crime. At 77% South Africa’s rate of reported economic crime remains significantly higher than the average rate of 49%. However, this year saw an unprecedented growth in the global trend, with a 36% period-on-period increase since 2016.”

The reason why some companies are being attacked by economic crimes is due to the traditional way of doing things. The use of technology in companies to protect their interest is growing at a quicker rate therefore it is important that they ascend to the digital world. They can start by installing anti-corruption software such that will be able to detect any malpractices in their financial accounts, abuse of resources etc within the organisation. Over the years, the C-suite has been the one to be held accountable of these criminal activities but if organisations turn to technology, they can have better chances of preventing any fraudulent behavior within and have executives that are adamant to the progress of these organizations rather than milking them of every cent.