Financial fraud costs US$400 billion a year
Financial fraud around the world, especially cybercrime, is growing exponentially and costs more than 700 companies more than US$400 billion a year.
Deloitte Australia's crisis management leader, Graeme Newton, said in a briefing yesterday that the task was "to help clients prepare for and respond quickly and effectively wherever the crisis or combination of crises is in the world, and ultimately emerge stronger."
Analysis of the impact of a crisis on reputation, cited by Newton, shows there is an 80 per cent chance of a company losing at least two per cent of its value (over and above the market) in any single month, in a given five-year period.
In each case researched and reported in the Oxford Metric and AON Reputation Review, the value loss was sustained, Newton said.
"It's about harnessing both our capabilities and competencies and focusing them on the crisis in a way that resolves it as effectively and efficiently as possible. The four key services the Centre offers are 24/7 monitoring, crisis communications, rapid response and crisis simulations. The key is to be prepared," Newton said.
"It has been identified that having a robust, evidence-based reputation strategy in place will minimise the likelihood of a critical event turning into a reputation crisis and will maximise the probability of recovery."
Deloitte partner Campbell Jackson, who is responsible for the forensic response practice, said, regardless of the nature of the crisis, how a company prepares for and reacts to it can determine the extent and duration of reputational damage.
"In our 2013 global executive survey on strategic risk we found that reputation damage was the number one risk concern for business executives around the world.
"According to a current global survey of c-level executives, board members, and risk-executives, they directly attribute more than 25 per cent of a company's market value to reputation," said Jackson.
Deloitte forensic risk services leader Chris Noble said the economic cost of natural disasters in Australia was estimated by Deloitte Access Economics to exceed A$6 billion a year. These costs are expected to double by 2030 and to rise to an average of $23 billion a year by 2050.
"Each year an estimated $560 million is spent on post-disaster relief and recovery by the Australian Government compared with an estimated consistent annual expenditure of $50 million on pre-disaster resilience: a ratio of more than $10 post-disaster for every $1 spent pre-disaster," said Noble.