UK is procurement fraud hot spot
British companies, on average, lose significantly more money to procurement fraud, and the country is far more reliant on ineffective manual detection techniques than other nations, according to a new study by analytics company SAS.
Some 24 per cent of UK businesses have been victims of collusion between suppliers, and 21 per cent have caught employees collaborating with vendors they share a stake in – higher than the EMEA average of 16 per cent. Some 31 per cent have been subjected to contract bid rigging and 43 per to duplicate invoices, significantly higher than the EMEA averages of 25 per cent and 27 per cent.
The research also found that 40 per cent of UK companies lose between €150,000 and over €400,000 a year compared to an EMEA average of 16 per cent.
However, UK companies are less likely to believe their losses are negligible (16 per cent compared to 23 per cent). This suggests a greater awareness of the damage inflicted by procurement fraud, which may translate into stronger efforts to stop it in future. It may also indicate UK companies have better detection mechanisms, which could partially explain the higher reported losses.
SAS said that British companies take a relaxed attitude to auditing and have largely failed to make the most of new technologies – including advanced analytics and artificial intelligence – in the fight against fraud. Only 29 per cent hold regular audits into procurement fraud compared to an EMEA average of 46 per cent.
Laurent Colombant, continuous compliance and fraud manager at SAS, said: “The UK compares poorly to other countries in its reluctance to invest in the latest detection technologies. Until British businesses take a hard look at their detection capabilities and modernise their processes, they will continue to fall behind.”