Around 45% of respondents in MENA have been a victim of at least one form of financial crime within their global operations during the 12 months preceding a survey conducted by Thomson Reuters. Globally, 47% had fallen victim.
In the report ‘Revealing the true cost of financial crime – Focus on the Middle East and North Africa’, 77% of survey respondents in MENA said they deliberately avoided customers, suppliers, countries or industries which they viewed as most exposed to financial crime.
Companies are aware that any connection, even unwitting, to any form of financial crime could potentially result in regulatory fines, reputational damage and even prosecution.
The survey also found that in MENA, 65% of relationships with customers, third-party vendors, suppliers and partners are screened with regard to bribery and corruption, money laundering, fraud, theft, cybercrime, and slave labour/human trafficking. Just 42% of these extensive third-party networks are fully screened at both onboarding stage and on an ongoing basis.
Across the region, 96% believe that bribery and corruption is an important issue to tackle, while 97% are supportive of sharing compliance best practice by companies. In fact, the majority of respondents across the region support the idea of collaboration in the ongoing fight against all forms of financial crime, but undoubtedly lifting the lid on its true extent, impact and cost – economic, social and humanitarian – is the first step to combating this global scourge, said the report.
The percentage of turnover lost to bribery and corruption was an average of 3.6% in MENA against a global figure of 3.2%, said the report.
Within the region, 57% believe that the consequence of this bribery and corruption will be less government revenue.
Moreover, those surveyed reportedly spent 3.8% of turnover to prevent financial crime issues around their global operations over the same period.
Thomson Reuters analysed 198 listed companies in MENA with a total sum turnover of $255bn, and the estimated lost turnover as a consequence of financial crime amounted to $8bn. Globally, a consequence of financial crime is an estimated loss of turnover of just over $1.45tn.
The company commissioned this global survey in March 2018 to better understand the true cost of financial crime, and to raise awareness of its wider impact on business, individuals and society as a whole. In total, over 2,300 senior managers from large organisations across 19 countries participated. M