How early detection can save millions in losses
Corporate fraud remains one of the most persistent and costly threats to companies worldwide, generating billions of dollars in losses each year. This reality underscores the urgent need to understand key fraud trends, identify vulnerable sectors, and adapt prevention strategies to face emerging challenges.
Corporate fraud: a global problem in numbers
The 2024 Report to the Nations, published by the Association of Certified Fraud Examiners (ACFE), shows that corporate fraud is a troubling reality across all sectors and regions. This report, based on 1,921 cases of fraud reported in 138 countries, estimates that fraud costs companies 5% of their annual revenue, amounting to approximately $5 trillion globally. Additionally, the average loss per case is $145,000, although frauds that persist over longer durations generate significantly higher losses.
Most common and costly types of fraud
- Asset misappropriation: This is the most common type of fraud, representing 89% of cases analyzed by ACFE. It involves the misuse of a company’s assets, such as inventory or cash. Although it is the most frequent type of fraud, the median loss is lower than other types, partly because it tends to be detected sooner.
- Corruption: Present in nearly half of the cases (48%), corruption includes bribery, conflicts of interest, and extortion, with a median loss of $200,000. Corruption tends to be particularly prevalent in areas where interactions with suppliers or government entities are common.
- Financial statement fraud: This type is less common but more costly, with a median loss of $766,000. Financial statement fraud usually involves manipulating figures to present a misleading financial picture, such as inflating revenue or understating expenses.
ACFE analysis of corporate fraud across eight geographical regions revealed notable regional disparities in corruption cases, with Southern Asia exhibiting the highest percentage (74%) and the United States and Canada the lowest (35%). These differences may be attributed to various regional factors, including cultural norms that influence the permissibility of corrupt practices, the robustness and enforcement of anti-corruption laws, and the prioritization of regulatory oversight. These findings underscore the complex interplay of cultural and regulatory elements in shaping the prevalence of corporate corruption, highlighting the need for targeted strategies tailored to each region’s unique legal and cultural landscape.
Percentage of corporate corruption compared to other types of fraud within each region. Source: ACFE
Regarding fraud channels, the digital channel is currently the main medium used for fraudulent activities, accounting for 43.59% of reported incidents. The expansion of methods such as phishing, malware use, and scams on online platforms highlights the urgent need to strengthen digital security and apply advanced solutions to protect corporate systems.
On the other hand, the telephone channel remains a significant route, involved in 20.51% of fraud cases. Fraudsters still leverage traditional techniques like phone scams and misuse of information obtained through calls. This medium is vulnerable to practices like “vishing,” or voice phishing, suggesting the importance of implementing additional verifications and training staff managing these interactions to detect and prevent potential fraud.
Sectors most affected by fraud
Certain sectors are especially vulnerable to fraud due to the nature of their operations. According to the 2024-2025 Corporate Fraud Trends Report by the Spanish Association of Companies Against Fraud (AEECF), banking and telecommunications are among the highest incidence of fraud due to the high volume of transactions and the sensitive nature of the data they handle. Banking accounts for 34.8% of reported cases, while the telecommunications sector represents 26.1%. Real estate, manufacturing, and retail sectors also show high vulnerability to supply chain fraud and document forgery.
Impact of digitalization and the pandemic on corporate fraud
The COVID-19 pandemic and rapid digitalization have changed the fraud landscape. The adoption of remote work and the accelerated digital transformation of companies have increased opportunities for fraudsters. More than half of the fraud cases reported in 2024 included a pandemic-related factor, such as changes in internal controls and transaction oversight, which have created a favorable environment for fraud. Cryptocurrency usage has also introduced new types of fraud, particularly in the conversion and laundering of stolen assets. Around 4% of fraud cases in 2024 involved cryptocurrency, with 47% of these cases being instances in which fraudsters converted stolen assets to cryptocurrency.
Primary detection channels and duration of fraud
Early fraud detection is critical to mitigate losses. The 2024 Report to the Nations indicates that 43% of frauds are detected through employee reports, underscoring the importance of a corporate culture of transparency and reporting. However, frauds detected by passive methods (such as accidental discovery or external reports) tend to last longer and result in significantly higher losses. Frauds discovered within the first six months typically result in losses of around $30,000, while those lasting over five years reach losses of up to $875,000.
Prevention strategies and tools
As fraud methods become more complex, companies must adopt a comprehensive approach to fraud prevention. The leading trends in fraud prevention include:
- Reporting culture: Since nearly half of fraud cases are detected through internal reporting, it is crucial for companies to encourage employees to report suspicious behavior without fear of reprisal. Establishing anonymous, secure reporting channels can significantly improve early detection.
- Implementation of advanced analytics technologies: Machine learning and data analytics are gaining traction as tools to detect suspicious behavior patterns and anticipate possible frauds. About 10% of companies have started using their fraud cases as training data for predictive algorithms, which could revolutionize future prevention strategies.
- Continuous monitoring and auditing: Internal auditing and real-time transaction monitoring are essential for detecting fraud before it becomes a costly issue. Companies with ongoing monitoring and regular review processes tend to detect frauds more quickly and reduce incurred losses.
- Fraud awareness training: Training employees on the risks and signs of fraud is a key measure to prevent incidents. Employees trained in fraud detection are far better equipped to identify unusual behaviors.
- Collaboration with external teams: Outsourcing fraud functions—a trend observed in the AEECF report—allows companies to access experts and advanced technologies without the need to maintain a large internal team. About 45% of surveyed companies rely on more than 50% of their fraud personnel being outsourced, suggesting that this practice is on the rise
Corporate fraud continues to evolve, adopting increasingly complex and challenging forms to detect. As companies adapt to an ever-changing digital environment, they must also reinforce their fraud prevention and response mechanisms. Integrating advanced technologies, promoting a reporting culture, and collaborating with external experts are crucial elements to combat fraud in 2024 and beyond.
Are you interested in protecting your company from potential fraud?
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