Dealing with issues of fraud and corruption are by no means something new for businesses in South Africa - or around the globe. In fact, all organisations whether in the public or private sector are faced with the risks of commercial crime every day. However, organisations are often left scrambling to deal with incidents of commercial crime after the fact, after they have already happened, as many organisations are reactive when it comes to addressing issues of commercial crime such as fraud, corruption, money laundering and cybercrime.
This can have a significantly negative impact on a business, its reputation, operations, and revenue. While a robust response plan can limit the negative effects of a crime that has been committed and minimise risk exposure, an organisation will still suffer losses as the crime has already been committed.
More so, commercial crime has been rising rapidly across South Africa as criminals seek to exploit any new vulnerabilities introduced into organisations by the disruption faced during the Covid-19 pandemic and adjust to a new way of working. According to crime statistics released by the South African Police Service, commercial crime has increased by 55.7%in the first quarter of the 2021/22 financial year compared to the same period in the 2020/21 financial year. Gauteng province has the highest instances of commercial crime reported during this time, with the Western Cape following behind in second place with the biggest increase of commercial crime recorded at 73.9%. Meanwhile, as digital adoption increases across the country to adapt to the new normal — outpacing cybersecurity measures — South Africa has fast become a target for cybercriminals with a recent cybersecurity report ranking the country in the top 30 most targeted countries for malware attacks and top 20 for Covid-19-related email threats.
This is why it is imperative that organisations be cognisant of the risks posed by commercial crime and take a more proactive approach to addressing these risks, which will go a long way in saving them from the significant financial and reputational consequences that follow these incidents.
With International Fraud Week upon us, now is the perfect time to sit back and consider the manner in which your organisation is dealing with these pervasive risks and develop an approach to commercial crime that is proactive rather than reactive. As the old adage goes, prevention is better than cure.
A proactive approach can give organisations an edge on crime
The value of having a proactive approach to tackling fraud and other commercial crime issues can never be understated. Being proactive will allow an organisation to better understand and identify the biggest risks they face with regards to fraud, corruption and more. This will enable an organisation to be prepared for and deal with such incidents effectively and meaningfully by focusing on these high-risk areas so they can be prioritised and addressed at the outset.
With organisations already faced with tightened or restricted budgets as a result of the economic impact of the pandemic, suffering any further financial losses as a result of commercial crime could have significantly damaging consequences, particularly for smaller to medium-sized businesses. Therefore, preventing commercial crime from happening in the first place is vital during such uncertain times.
How to build effective preventative measures to combat commercial crime
When taking a proactive approach in managing fraud and commercial crime risks, there are many steps an organisation needs to take. Here are some practical tips your organisation can take when driving such a proactive approach:
- Conduct a risk assessment of the entire business so that you fully understand the various risks faced
- Identify which risks are low, medium or high. This will allow you to focus more resources on any priority risks identified. Once you've done this, you will know what risks need to be addressed and which ones need to be prioritised. Thereafter, you can implement meaningful measures to address each of these risks;
- Develop a culture of zero tolerance to fraud and other irregular activity throughout all levels within the organisation;
- Implement a well-considered anti-fraud and corruption policy
- Raise awareness of these risks throughout the organisation and provide regular employee training on commercial crime risks and preventative measures
- Lead by example and ensure top-level commitment to addressing commercial crime risks.
Ultimately, no matter the size of the business, spending time implementing meaningful preventative measures will go a long way in mitigating the risk of becoming the victim of commercial crime. Putting in the work to stop something bad from happening is easier and less costly than having to resolve the consequences of it happening later on. It’s always better to be safe than sorry.