The KPMG Forensic Fraud Barometer for 2022 shows another year with striking figures in white-collar crimes across Switzerland, showing the ever-present threat that exists to private individuals, public institutions as well as banks. Mitigating the loss of and protecting assets must remain at the forefront of organizations’ priorities, while appropriately addressing financial loss when it does occur.
The annual analysis carried out by KPMG Switzerland of white-collar crimes exceeding CHF 50,000 and tried by Swiss courts also includes statistical data that can be used to make comparisons with previous years and to assess the severity of financial crime in the current year. The year 2022 saw an overall increase of 2.4% compared to the previous year and a 15% increase in convictions compared to 2021, with 78 convictions and a total loss of CHF 581 million.
Fraud can happen to anyone
The most common crimes tried in court in 2022 were embezzlement (14 cases), insurance and social security fraud (12 cases), and scams (13 cases). However white-collar crime comes in many other forms as well, such as bribery, financial statement fraud and money laundering. Contrary to popular belief, private individuals were found to be both the primary perpetrators and targets of fraud. Private individuals targeted for fraud made up 40 of the 78 cases, compared to 11 in the previous year, with a total loss of CHF 119 million, twenty times higher than in 2021. Although public institutions, the second largest target group, had fewer cases (19), one single tax fraud case amounted to CHF 340 million. Meanwhile, financial institutions saw their losses decline from CHF 300 million in 2021 to CHF 27 million in 2022. As in previous years, the most common perpetrators were private individuals, top executives and professional fraudsters.
Financial crime in its many forms is prevalent throughout Switzerland, with the Central Switzerland and Zurich regions being the most affected, both on an individual and organization level. These findings illustrate the far-reaching impact of economic crime on all members of society, and serve as a reminder that unless organizations proactively protect their assets, they risk a continued upward trend in financial losses for years to come.
Pandemic-related incentives and enablers of fraud
Although society seems to have come out on the other side of the pandemic and is doing its best to forget all the chaos that COVID-19 brought with it, we continue to feel the lingering effects on the economy and have seen an increase in financial crime.
According to the ACFE’s “Occupational Fraud 2022: A Report to the Nations” , the shift to remote work in most parts of the world accounted for the largest percentage of pandemic-related factors leading to increased occupational fraud. Increased job insecurity as a result of the pandemic, including fear of job loss, denied raise/promotion, reduced benefits and/or pay was found to be even more prevalent among individuals in 2022 than in 2020, making fraudulent activity more attractive to those disadvantaged by the situation. The climate of fear coupled with the new digital capabilities that were introduced to allow people to continue doing business as usual from home, opened up a wealth of opportunities for data interception and credential theft. It continues to be vital for organizations to both implement the necessary safeguards for their systems to protect their data and assets, but also carry out controls where COVID-19 assistance was provided to ensure the legitimacy of the financial assistance received. We expect that many more white-collar crimes related to the pandemic will come to light, as detecting, investigating and prosecuting them can take years.