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Fraud, Cyber and Security Risks Rose in 2016

You might think that your company or jobsite is secure and protected from risk. Don’t bet on it. If you think that you have everything covered and you have shifted your risk, think again. Whatever you might be doing to protect your company, the potential risk is much higher than you might think. We took a look at the Kroll Global Fraud and Risk Report and found that the stats were shocking.

According to the 2016/2017 Kroll Global Fraud and Risk Report, 82% of executives surveyed reported that they had an incident of fraud over the previous 12 months. The report, which examines major global theaters and industries, found that most responding companies have seen an increase in fraud, cyber and security breaches.

The study, completed by Forrester (Nasdaq: FORR), “one of the most influential research and advisory firms in the world,” includes “10 in-depth interviews and an additional online survey with 545 senior executives worldwide across multiple industries.”

The construction industry specific stats and charts caught our attention. The worldwide stats are interesting, but we thought that we would focus on the US to give you an insight into your risks.

First, if you are thinking that since this is a global report the numbers for your business in the US must be lower, take a look. The report covers fraud, cyber and security risk.

For the construction sector, 70% of the companies reported that they had an incident of fraud in the 12 months previous to the survey. The most common types were vendor, supplier or procurement fraud (28%); internal financial fraud (21%); corruption and bribery (19%); theft of physical assets or stock (19%). The most commons perpetrators were junior employees (45%); ex-employees (33%); senior or middle management employees (30%); freelance/temporary employees (30%); vendor/suppliers (30%). The most common means of discovery was through an internal audit.

Of the reporting companies, 77% reportedly had cyber security breaches in the prior 12 months. The most common incidents were virus/worm infestation (35%); email based phishing attacks (30%); data deletion or loss due to system issues (30%). Ex-employees were the most common source of those breaches.

The most common targets for those cyber attacks were “customer records, employee records and physical assets/money.”

Of the respondents, 63% reported that they had experienced security incidents including environmental incidents, geographic or political risks or workplace violence. Interesting that 25% of the incidents were from ex-employees.

The report points out the need for additional and on-going systems to detect and protect your construction company, your employees and your job sites from risk from an ever-changing risk scenario. So, if you are not paying attention or are resting on the thought that you are safe from risk, 2017 is the year to give risk a second thought.