Organizations are adding more technology capabilities to their fraud investigation teams, according to the
Association of Certified Fraud Examiners' (ACFE's) In-house Fraud Investigation Teams: 2017 Benchmarking Report. Building forensics and cybersecurity expertise is a big focus among the nearly 1,500 anti-fraud professionals who responded to the global survey. Forty-three percent say their organization is seeking or expected to add expertise in digital forensics to its fraud investigation team. Conversely, 39 percent say their team currently has such skills.
Additionally, 36 percent of respondents say their fraud team has cybersecurity skills. A similar percentage (37 percent) is looking to add those skills. Most fraud investigation teams aren't investigating cyber fraud and hacking, possibly reflecting a lack of expertise. Only 16 percent investigate such incidents frequently, while 27 percent investigate them occasionally.
Frauds that teams investigate frequently are:
- Employee embezzlement (40 percent).
- Frauds committed by customers (40 percent).
- Frauds committed by vendors or contractors (32 percent).
- Human resources issues (30 percent).
Some fraud investigators have a lot on their plates, the survey notes. Although most (51 percent) work on fewer than five cases at a time, 30 percent work on 10 or more cases concurrently.
And fraud investigations are only part of their jobs. The average team spends 56 percent of its time on investigations. The rest of the time, investigators are working in areas such as internal audit, compliance, and information security.
The high case load and demands on investigators' time would seem to call for some automated assistance, but most respondents say their organization isn't using such technologies. Just 38 percent use case management software. Forty-seven percent use data analytics software, including spreadsheet software, in their work. That's not because they don't know how to use it — most respondents (62 percent) say they have analytics and data mining skills on their team.
And what about the results of these investigations? Most respondents say their team substantiates the majority of cases, with 34 percent reporting that they substantiate more than three-fourths of alleged frauds. Forty-six percent of respondents say most fraud investigations result in disciplinary action, but just 17 percent say their team refers most investigations for prosecution. Indeed, 70 percent of respondents report that they refer one-fourth of cases or fewer for prosecution.
Organizations are even less likely to recover fraud losses, the report finds. Just 24 percent say they recover more than half of fraud losses, while 59 percent recover one-fourth or fewer.