The ACFE’s recent study showed that worldwide businesses are losing about 5% of their turnover due to fraud and dishonesty. A report dated 2008 on “the impact of crime on small businesses” which was commissioned by the Presidency showed that SMEs lost about 20% of their turnover due to crime which is 4 times higher than the normal rate. Crime is sadly one of the biggest reasons why so many SMEs are closing their doors and the number of entrepreneurs is decreasing in South Africa for the past few years.

In our experience whilst operating in both the SME and Corporate market for several years we found the following:

  • The threat of crime and dishonesty for SMEs are similar to those of corporates;
  • Losses due to fraud and dishonesty are a direct result of lacking policies and procedures;
  • The frequency and threat are greater to SMEs due to the lack of proper governance and compliance;
  • SMEs do not really have identified red flags to serve as a warning system of possible irregularities (read here more on what to be on the look-out for -link case study 1);
  • That SMEs are ideal targets for criminals who specialize in cybercrime since their systems are not always as secure and protected as it should be.

ExposeIT Enterprise Insights Analysis powered by IBM technology, is an automated identity link and relationship resolution engine which researches entities within operational or business data, creating alerts to flag specific “high-risk” anomalies in terms of fraud, waste and abuse.

Our qualified analysts are subject matter experts in terms of fraud detection and prevention (CFE). The team have created several use-cases relating to the identification/detection and prevention of fraud, waste and abuse across multiple industries and sectors which include, amongst others:

  • Property Insurance Claims analysis – vehicle theft and non-vehicle asset loss claims.
  • Occupational Fraud models:
    • Payroll schemes – ghost employees/account number manipulation.
    • Financial System schemes -Creditor and Debtor billing and refund schemes.
  • Health Insurance Schemes – over-billing, manipulation of procedure codes etc.
  • Gateway and Network Security models – Hacking/end-point and data-protection.

There are several options available in terms of acquiring an ExposeIT EIA license for business operational use (internal), as a plug-in consumption-based model with specialist outsourced services provided by XTND, or a combination thereof.

It is unfortunately an accepted fact that SMEs are at the forefront of economic policy in developing economies, playing critical roles in local economic growth and development. SMEs are further the platform where job creation should be prominent due to the fact that automisation does not play such a big role with entrepreneurs and emerging businesses. White collar crime, however, carries the most weight and has immense negative influences on job creation – only one of the devastating and long-lasting effects on Government, Business and ultimately, Society in general.

If we want South Africa to have a sound economy again we will have to engage and get involved and proactively put measures in place that will prevent, detect, respond and secure White collar crime.