Almost half (42%) of Midlands businesses have experienced fraud in the last five years, a new survey from accountancy and business advisory firm BDO has found.
Of those businesses, 78% said they had experienced fraud in the last 12 months. Additionally, more than a quarter (29%) said they had seen multiple fraud incidents in the last year.
The results come from a BDO survey of 500 directors and business owners from entities with more than 200 employees, conducted to find out directly from the business community about their experience of fraud.
In response to the increased fraud risk, Midlands businesses are taking proactive steps to tackle the issue. According to the BDO survey, around a third of businesses (34%) have increased investment in IT security, with 28% spending more on fraud detection tools such as AI and data analytics. The survey shows that anti-fraud-related expenditure has increased for three-fifths of regional businesses (64%).
Commenting on the findings, Sat Plaha, a partner at BDO LLP in the Midlands and Head of Regional Forensic Services, said: “Fraud remains a significant problem for individual businesses and the wider economy. Fraud losses directly impact profitability and can have catastrophic knock-on effects.
“It is clear that large businesses are particularly tempting targets for fraudsters who are lured by the prospects of higher gains and attracted by the potential vulnerabilities and entry points associated with organisations with high employee numbers.
“However, this year there are some definite positive trends. Anti-fraud-related expenditure is increasing compared to the previous year, with 73% of Midlands businesses investing between £100,000 and £250,000.
“Following the recent introduction of the Economic Crime and Corporate Transparency Act, we hope the coming year will see all businesses enhance their anti-fraud infrastructure, continue the drive to establish more robust preventative regimes, and proactively monitor and respond to new threats as they arise.”
According to the BDO report, almost half of Midlands businesses (45%) have conducted a fraud risk assessment within the last year, with 35% of companies surveyed providing fraud awareness training for employees during the same period.
