3 July 2023
Discover the latest findings from Kroll’s research, showing that over two-thirds of executives and risk professionals in Singapore are planning to combat the anticipated surge in financial crime risks by leveraging technology.
Kroll, a renowned independent provider of global risk and financial advisory solutions, has recently published its highly anticipated 2023 Fraud and Financial Crime Report. This comprehensive report sheds light on the expectations of Singapore-based executives and risk professionals worldwide regarding the rise of financial crime risks in the coming year.
With a particular focus on cybersecurity, data breaches, and financial pressures on organizations, the report highlights the urgency for proactive measures to combat these growing threats. Among the key findings, the report reveals that a majority of respondents are planning to invest in technology, while data integrity poses a significant challenge during implementation. Reshmi Khurana, Managing Director at Kroll Singapore, emphasizes the need to leverage technological advancements, strengthen governance, and foster transparency to ensure collective success in the ongoing fight against financial crime.
Increasing Financial Crime Risks: The report highlights that 62% of Singapore-based executives and risk professionals expect financial crime risks to escalate within the next 12 months. This sentiment is mirrored on a global scale, with 69% of respondents expressing similar concerns.
Technology Investments to Counter Financial Crime: In response to the anticipated rise in financial crime risks, nearly two-thirds (67%) of global respondents, including those from Singapore, plan to increase investments in technology. This proactive approach aims to enhance defense mechanisms and mitigate potential threats. However, respondents also note that data integrity poses the greatest challenge during the implementation of new technologies.
Governments’ Struggle Against Financial Crime: A significant portion of respondents, both globally (59%) and in Singapore (60%), believe that governments are either losing ground or will lose ground in the fight against financial crime due to the rapid evolution of technologies. Digital currencies, evolving technologies, data privacy, and sanction evasion tactics are identified as the top challenges faced by governments.
Anti-Money Laundering Challenges and Third-Party Gatekeepers: In Singapore, 52% of respondents agree that third-party gatekeepers create challenges related to anti-money laundering. Globally, 58% of respondents share the same sentiment, highlighting the pervasive nature of this issue.
Supply Chain Controls and Diligence: In response to exposure to materials originating from sanctioned countries or subject to export controls, 78% of respondents in Singapore and 73% globally are dedicating more time to enhancing supply chain controls or diligence in the coming year.
Financial Crime Compliance and Cryptocurrencies: Almost one-third of respondents, both globally and in Singapore, indicate that their companies’ financial crime compliance programs consider the risks associated with cryptocurrencies. This acknowledgment reflects the increasing significance of digital currencies in the financial crime landscape.
ESG Factors and Financial Crime Compliance: A majority of respondents in Singapore (62%) and globally (61%) agree that environmental, social, and governance (ESG) factors should be a consideration for all businesses and part of every financial crime compliance program. This finding highlights the growing importance of incorporating ESG principles into risk management strategies.
Greenwashing Concerns: The perception of greenwashing, or false claims of environmental responsibility, prompts changes to financial crime compliance programs for 66% of Singaporean respondents and 60% globally. This indicates a heightened awareness of the risks associated with deceptive sustainability practices.
The 2023 Fraud and Financial Crime Report by Kroll provides valuable insights into the expectations and challenges faced by executives and risk professionals worldwide, with a particular focus on Singapore. With the majority of respondents anticipating an increase in financial crime risks, the report underscores the necessity for organizations to invest in technology while addressing the challenges of data integrity. It also emphasizes the need for governments to adapt to rapidly evolving technologies and highlights key areas of concern such as anti-money laundering, supply chain controls, cryptocurrencies, ESG factors, and greenwashing. By harnessing technology advancements, strengthening governance, and fostering transparency, businesses and governments can collaborate effectively to mitigate financial crime risks and ensure a safer and more secure future.