According to PwC’s Global Economic Crime Survey 2020, over half of UK businesses reported an incident of fraud, corruption or other economic crime in the last two years. This is the highest rate recorded in the Survey and indicates an upward trend in sophisticated fraud. Should the impact of COVID-19 align with previous unprecedented events (for example the 2008 financial crisis) we can expect to see an increase in financial crime as fraudsters look to exploit areas of weakness. In this article we look at the types of financial crime that may arise during the COVID-19 pandemic and what businesses can do to minimise risk and protect itself accordingly.
Owing to COVID-19, there has been a dramatic global shift in the way we work and live. Supply chains have been severely disrupted, newly forged government rescue packages have been tabled and there continues to be an unpredictable and unprecedented change in customer demands and workforce behaviours. Businesses of all shapes and sizes have been forced to react quickly and adapt. Ultimately this shift, for many businesses, will result in a changed financial crime risk profile.
This article looks to identify possible evolving risks and how best to engage in preventive measures, efficiently escalate any suspicions or incidents of financial crime occurring both internally and externally via associated third parties and potentially defend against regulatory enforcement action. We have learned from the 2008 financial crisis that regulatory expectations and oversight heighten in the wake of such world events and businesses must remain well equipped to maintain a robust anti-financial crime (“AFC”) compliance programme. Here we identify key areas of risk across all forms of financial crime impacting the supply chain, internal corporate governance as well as customers and clients.