Stolen data most costly theft for companies

Companies are losing more via electronic theft of data than physical theft of assets, a report has shown.

Stolen data most costly theft for companies

Previous editions of the Global Fraud Report from consultancy Kroll showed physical theft of cash, assets and inventory as the most widespread form of fraud by a considerable margin.

This year’s findings showed electronic and information theft at 27.3% of total fraud losses, marginally above physical theft at 27.2%.

The 2010 study showed the amount lost by businesses to fraud rose to $1.7 million per billion dollars sales worldwide from $1.4 million a year earlier, the report said – although this might in part be due to better detection and awareness.

Much more work is done electronically, and that creates new opportunities for fraud

“How much fraud there is depends more on opportunity than anything else,” said Tommy Helsby, Kroll chairman for Europe, Middle East and Africa. “Much more work is done electronically, and that creates new opportunities for fraud. It takes time for companies to catch up with that.”

Inside job

Information-based industries – particularly financial services – had by far the highest level of electronic theft followed by professional services and then technology, media and telecoms.

“There’s a real range of dangers,” said Helsby. “It can be simple theft or the risk of reputational damage if your firm loses customer data.”

Fraud was most often an “inside job” carried out by a company’s own employees, the poll of more than 800 senior executives worldwide showed.

Junior employees and senior management were the most likely perpetrators of fraud. Staff or agents were the most common perpetrators of fraud in every region except Latin America where customers were the principal fraudsters.

Kroll’s Helsby said the firm had also investigated data theft that appeared to have been carried out by a sovereign nation or state-linked firms particularly in emerging markets.

Analysts and Western spy agencies are increasingly concerned about “state capitalist” nations such as China stealing intellectual property from firms, but Helsby said from his anecdotal experience he could not say whether this was increasing or not.

But perhaps because of the financial crisis, enthusiasm for new systems was falling. Only 48% of companies were planning on spending more on information security in the next 12 months, down from 51% last year.

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