Well-executed fraud or money laundering operations, run from inside the business, can severely damage or destroy even the largest company, says David Porter, Head of Security Practice at leading specialist IT consultancy, Detica.

The statistics on internal fraud are startling. For some organisations it is estimated that the cost of internal fraud can be as high as six percent of turnover:

Porter sees these figures set to rise: “The current softening in the global economy will reveal further damaging fraud cases that were less apparent during periods of stronger cash flows. The role of chance in the discovery of fraud is telling in itself and the number of reported cases is likely to be the tip of a large iceberg.”

To compound the problem for regulated companies, tackling fraud is high on the political agenda, with the FSA in the UK and the SEC in the US, both setting down specific requirements for companies to tackle this issue. Over and above this, the Basel II Accord is laying down tough requirements for banks to tackle these areas.

Porter believes that technology has a key role to play in demonstrating good corporate governance: “In the long term regulatory bodies will look favourably upon companies that are able to demonstrate good corporate governance and best practice operational risk management. Technology, judiciously selected and innovatively applied, will be key to achieving this. Management and staff of such companies will then spend less time worrying about regulations and more time adding value to their brand and business.”

About Detica’s Information Security Practice:

Detica’s security capabilities are founded in over 30 years of experience of providing information security advice to Government departments, including MOD, HM Customs & Excise and the Home Office.

Today Detica is the UK’s leading supplier of information security advice and solutions to both government and commercial clients (source: The Industry Research Group annual audit of Top UK Consultancies, 2001 and 2002)

Detica, whose commercial clients include Eurostar, Prudential, Centrica, Three, National Express Group and Microsoft, is one of a very few companies to achieve BS7799 accreditation and has a number of consultants who are accredited by the UK Government's CESG Listed Advisor Scheme (CLAS).