While a quarter of fraudsters use technology to rip off companies, only 3% of firms have detected illegal behaviour using data analytics, according to research.

A quarter of technology-enabled frauds were, in fact, caught accidentally, the study by KPMG found, demonstrating that companies are failing to harness new methods of fraud detection.

KPMG’s analysis found that companies are using traditional methods to detect fraud, and remain reliant on employees or third parties, like suppliers and customers, to report suspicious behaviour.

>See also: The seven types of e-commerce fraud explained

Nearly half (44%) of fraudsters were caught as a result of a tip or whistleblowing hotline, highlighting the importance of enabling individuals to feel safe to step forward without fear of retribution, and giving them the means to do so.

The research, which analysed 750 fraudsters worldwide, found that the average fraudster is male, aged 36 to 55, holds a senior role in the company and has worked there for at least six years. 

A third of those investigated held executive or non-executive director roles, while 32% were in management jobs and 44% were able to commit fraud because they had unlimited authority.

The existence of weak controls within businesses remains a growing problem. KPMG’s research revealed cash-strapped companies are failing to invest in stronger anti-fraud controls, leaving them vulnerable to opportunistic white-collar criminals.

In 61% of cases, weak internal controls in businesses presented an opportunity for fraud, compared with 54% in 2013.

>See also: Top 8 ways to fight mobile banking fraud

“While it’s clear that fraudsters are all too comfortable using technology to perpetrate a fraud, we are seeing little evidence that companies are doing the same in response to prevent it,” said Alex Plavsic, head of investigations at KPMG in the UK.

“A shockingly small number of companies have invested in threat-monitoring systems and data analytics, which can shift through data looking for suspicious items and help businesses uncover and question anomalous or suspicious behaviour.

“Without anyone to keep their power in check, these executive fraudsters can commit high value fraud and remain undetected for a significant amount of time.  They pose a double threat to their employer: not only can they use their authority to override controls, they can also order employees to perform tasks to assist or cover their misdeed, making it harder to detect.”