Risk management is not just about compliance: it’s also about reducing costs and, more and more, is becoming a function of adding value to an organization. But many business executives lack the resources and skills to implement enterprise fraud and misuse management (EFM) in their organization, despite the competitive advantage that a fraud risk management program can provide, according to a new Deloitte survey.
EFM involves the use of analytical technology and services to address fraud at a company-wide level. The survey reveals that nearly one-half of executive respondents (47 percent) are adopting or evaluating an enterprise view of fraud management. However, executives also believe their organization could enhance their ability to prevent or detect fraud through improvement in internal controls (28 percent), fraud awareness training (25 percent) and anti-fraud technology (22 percent).
A strong fraud risk management plan makes good business sense, according to Donna Epps, partner, Deloitte Financial Advisory Services LLP and national leader of Deloitte’s anti-fraud consulting group. “Organizations should combine their fraud-related activities to create an integrated approach to EFM, which can help them improve detection of criminal activities, meet regulatory obligations and reduce costs.”
Another area where organizations lack is in leveraging so-called Big Data analytics.
Only 13 percent of survey respondents say their organization is currently using Big Data analytics, with 23 percent currently assessing and researching their business’ need for a Big Data strategy. In fact, 17 percent of executives report that their companies are not planning implementation at this time.
“Having a strategic plan that incorporates the use of Big Data is key to having an effective enterprise fraud program,” said Samir Hans, principal, Deloitte Financial Advisory Services LLP and leader of Deloitte’s EFM practice for the commercial and public sector industries. “It is important to remember that the education and process toward EFM is a journey, not a sprint.”
Based on the documentation process of the legal profession, legal departments are ahead of the curve in the data collection phase, but lag behind other departments in turning this information into actionable insights, Richard Flynn explained in a four-part series this year.
Flynn wrote: “Big data is not a ‘magic button’ that will help legal departments become more efficient, but rather a tool that can bring results when implemented correctly.”
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