Manufacturing businesses report high levels of fraud, cyber and security incidents in 2017>
Manufacturing and Logistics IT
2017/18 Kroll Annual Global Fraud & Risk Report The proportion of executives reporting that their companies fell victim to at least one instance of fraud over the past 12 months was 86%, two percentage points higher than the global average across all industry sectors (84%). An even greater percentage of executives from the manufacturing sector (88%) said their companies had experienced a cyber incident or information theft, loss, or attack over the past 12 months. Just over seven in 10 respondents (72%) reported the occurrence of at least one security incident during the past year, two percentage points above the global average. The Kroll Report reveals that respondents in the manufacturing sector are experiencing a heightened sense of vulnerability to fraud, cyber, and security risks, with information-related risks now being the area of greatest concern. Information theft, loss, or attack was again the most prevalent type of fraud experienced in the manufacturing sector, cited by 33% of respondents, up 3 percentage points from the previous year. Corruption and bribery was second on the list, reported by 28% of executives, more than twice the reported incidence in last year’s survey (12%). More respondents from the manufacturing sector (88%) reported cyber incidents compared to the global figure of 86%. Top three types of incidents reported by survey respondents (by category) Fraud Information theft, loss, or attack (33%) Corruption and bribery (28%) Management conflict of interest (26%) Cyber Virus/worm attack (38%) Data breach resulting in loss of customer or employee data, IP/trade secrets/R&D (26%) Email-based phishing attack (26%) Security Physical theft or loss of intellectual property (45%) Environmental risk (including damage caused by natural disasters such as hurricanes, tornadoes, floods, earthquakes, etc.) (24%) Workplace violence (19%) Employee privacy, safety, or morale was negatively affected by incidents according to 76% of respondents whose companies had experienced fraud, 86% of those that reported a cyber incident, and 76% of executives whose companies endured a security event. Approximately two thirds of respondents stated that customers had been negatively impacted by all three risk factors â 66% by a fraud incident, 63% by a cyber incident, and 59% by a security incident. A similar proportion said that the impacted companyâs reputation had suffered due to a fraud (66%), cyber (68%), or security (69%) incident. Businesses suffered significant economic damage from fraud, with nearly one in five respondents (18%) reporting losses of 7% or more of company revenues. No respondents from the manufacturing sector reported this magnitude of financial impact in last yearâs survey. More than six in 10 (62%) respondents from the manufacturing sector believe their companies are highly or somewhat vulnerable to information theft, loss, or attack, 5 percentage points higher than the global average. With reported cyber incidents at an all-time high and perpetrators seeming to develop new methods of attack virtually every day, at least half of all executives surveyed are apprehensive about every type of cyber incident identified in the survey â with 57% especially wary of data deletion. More than half (53%) of respondents stated their companies could be particularly prone to physical theft or loss of IP, the greatest single concern. Insiders and ex-employees continue to pose the greatest fraud threat to companies in the manufacturing sector. Respondents revealed that fraud incidents are often inside jobs perpetrated by one or more of the following: junior employees (42%), ex-employees (34%), or vendors/suppliers (30). Random perpetrators were the main culprits of cyber (41%) and security (31%) incidents experienced by executives in the manufacturing sector. 49% of respondents currently involve the board of directors in the f A large proportion of respondents have adopted security risk mitigation measures, but given the high incidence and feelings of vulnerability around theft/loss of IP, it was surprising to see that only 73% of respondents have a plan for securing intellectual property. However, almost a quarter (21%) of respondents plan to implement these measures over the next 12 months.
Link: https://www.logisticsit.com/articles/2018/02/21/manufacturing-businesses-report-high-levels-of-fraud,-cyber-and-security-incidents-in-2017/