In the never-ending battle against fraud, putting the right systems in place is still a struggle across the sector. Crimes committed by customers made up the bulk of incidents the last two years, according to PwC figures, but managers are questioning prevention costs and their own expertise in fighting the problem, the report found.

In its bi-annual survey of cybercrime published yesterday, the consulting group PwC confirmed that fraud committed by customers has risen sharply since data was collected two years ago.

Fraud by customers made up 35 per cent of incidents, up from 29 per cent in 2018, and it topped the list of crimes reported by respondents in a wide-reaching survey of global businesses.

In the last two years, 39 per cent of businesses said that external breaches were the main source of economic crime incidents. One in five respondents said suppliers were the source of their most disruptive external fraud, and those who reported losing more than $50 million to cyber crime reached 13 per cent. Companies reported antitrust, insider trading, tax fraud, money laundering, and bribery and corruption as the top-five costliest frauds in terms of direct loss, and these are often compounded by remediation costs, PwC reported.

The consultancy group’s Global Economic Crime and Fraud Survey collated responses from more than 5,000 organisations across 99 countries. Insights were gathered from companies that have experienced on average six incidents over the last two years, and findings used to assess the cost of cyber protection and what businesses can do to be more vigilant.

Cybercrime, and other more traditional types of crime are major challenges for wealth managers, perhaps unsurprisingly given the large assets they hold on behalf of high net worth and ultra-HNW individuals. Organisations such as family offices and private banks are being warned, for example, that their traditionally discreet profile is no guarantee against being attacked.

No region has been spared customer fraud over the last two years. The steepest increases were seen in the Middle East, with 47 per cent of companies registering criminal incidents (up from 36 per cent in 2018) and 41 per cent in North America, up from 32 per cent from two years ago.

"Getting to the root of the problem is key to preventing and dealing with future fraud. Whether it's through technology, new processes, skills and training, or a combination - the result is strengthening business as a whole against crime, which is ultimately good for the consumer too," Kristin Rivera, PwC global forensics leader, said.

The survey found that around half the organisations have put additional measures in place in response to breaches, with 60 per cent saying that they were better off for it. On the flipside, PwC said that nearly half of the respondents did not investigate after an incident and barely a third reported the crime to their board.

In more proactive stances, results showed that around two-thirds of organisations said they are beginning to use advanced technologies such as artificial intelligence and machine learning to combat the problem. Equally, though, managers said that they were concerned about the cost of these measures and admitted they lacked internal expertise to tackle the problem head on. Roughly a third reported that their organisations struggled to see the value technology brings to fighting fraud.

PwC also cautioned that tech alone is no silver bullet. "Collecting the right data is just the first step. How the data is analysed is where companies will have an advantage when fighting fraud. Companies often fail to see the value in technology when they don't invest in the right skills and expertise to manage it," Rivera said.

Criminals too are indiscriminating. Cybercrime was named in the top three most disruptive crimes experienced across sectors, with media and telecomms reporting the most impact at 20 per cent, government and public sector second at 17 per cent, and consumer markets third at 16 per cent, with financial services close behind at 15 per cent.