Growing Demand for Corporate Security Experts
The recession may lead to a surge in e-crime. Recent research conducted by KPMG shows that fraud committed by managers, employees, and customers tripled last year compared to the year before. KPMG also found that companies foresee an increase in the number of employees and IT professionals who are willing to steal data or sell insider knowledge due to the poor economy. The growing government “economic stimulus” and “bailout” programs are also seen as breeding ground for fraud, waste and abuse. Now as the financial crisis continues to unfold, new suspicions of fraud are emerging along with demand for experts who can find evidence of wrongdoing.
Executive search firm, A.E. Feldman, says demand is poised to surge for senior level managers and executives with expertise in corporate security. Firms are increasingly tapping into specialists who fit seamlessly into the corporate world… but look at it in an entirely different light. One veteran corporate security expert working with A.E. Feldman warns, “Whether they are monitoring accounting practices, combating corporate espionage or taking steps to protect staffers and information overseas, multinational and domestic corporations must be keenly aware of what is out there to protect their people and their assets– especially during times of economic turmoil.”
Emerging Suspicions of Fraud
The Internet Crime Complaint Center (IC3), a joint operation between the FBI and the National White Collar Crime Center (NW3C), reports that internet fraud rates surged 33% last year. Some 275,284 complaints were filed last year with the Internet Crime Complaint Center (IC3). The cost associated with fraud is also rising. The total dollar loss from all 72,940 cases of fraud referred to federal, state and local law enforcement was $246.6 million in 2008, with a median dollar loss of $931 per complaint - up from $239.1 million in total reported losses in 2007.
Moreover, the FBI currently had more than 1,600 open mortgage-fraud investigations at the end of fiscal 2008, compared with 881 two years earlier, according to the New York Times. In addition, 530 corporate-fraud investigations are currently open.
The spike in fraudulent activity is also prompting more questions on how stimulus funds and investor money is being spent. The American Recovery and Reinvestment Act (ARRA) and other international attempts to boost the global economy have unintentionally introduced new opportunities for fraud, according to Risk Center, citing global risk consulting company Kroll
“Those impacted by the economic instability who are inclined to engage in fraudulent business practices will work to secure stimulus funds by any means possible,” said Blake Coppotelli, Senior Managing Director in Kroll’s Business Intelligence and Investigations practice. “One prime area is infrastructure projects. With the near collapse of the real estate and construction markets, traditional fraud and rackets, such as bribery, kickbacks and bid-rigging, will find a wealth of opportunity in the stimulus funds. In our experience, without extensive anti-fraud policies, oversight and enforcement, 10% of these funds will be lost to fraud and criminal activity.”
Growing Demand for Security Experts
The NYT states that fraud investigators are employed by a growing number of firms outside the government including security consulting firms, accounting firms, global business consulting and internal audit firms. The report adds that while many investigators have backgrounds in forensic accounting, internal audit and law enforcement, the field is also drawing finance executives, paralegals, librarians and former journalists.
“You can look at corporate security professionals as the traffic cops of the corporate world,” according to one corporate security expert consulted for this article. In order to prevent and combat fraud, corporate espionage, and ensure the security of corporate assets and staff, you need individuals like forensic accountants, forensic IT pros, and other corporate security professionals who will perform as watchdogs. He adds that companies are increasingly going to tap into specialists with security expertise who have a different and sharper way of looking at any given situation.
Are you working in corporate security? If you want to grow your career or discuss your firm’s talent or security needs, contact A.E. Feldman’s President, Mitch Feldman, today.
