Navigating the risk landscape to build fraud-resilient frameworks

In brief

• Organizations must shift from reactive compliance to proactive fraud prevention by integrating technology, governance and ethical leadership.
• Sector-specific strategies and robust whistleblowing frameworks are essential to detect, deter and respond to increasingly sophisticated fraud schemes.

In today’s times of geopolitical uncertainties, digital acceleration and increasingly savvy fraud schemes, organizations need to proactively establish fraud-resilient frameworks by integrating technology, governance and ethical leadership. Fraud is no longer a series of isolated incidents—it is a systemic threat embedded in complex digital ecosystems. According to the Global Integrity Report (GIR) 2024 by EY, 45% of organizations experienced significant integrity incidents in the past two years, with 93% involving third parties. These figures underscore the urgent need for organizations to move beyond reactive compliance and adopt a technology-enabled approach to fraud prevention.

Rapid digital transformation, without corresponding internal controls, has created new vulnerabilities. The anatomy of modern fraud is increasingly sophisticated, often with cross-departmental involvement to exploit gaps in oversight. The EY-FICCI knowledge paper, The Fraud Factor, emphasizes that organizations must embed integrity into every layer of operation, supported by structured reporting frameworks, regular audits and leadership accountability.

India’s Digital Personal Data Protection Act, the proposed National AI Safety Institute and global frameworks like the EU’s AI Act and GDPR are reshaping compliance expectations. With 69% of Indian respondents finding it challenging to keep pace with regulatory changes and 62% believing that unethical behavior is often tolerated when committed by senior leaders, the growing gap between policy and practice is evident and can be bridged through robust governance and ethical leadership.

As per ACFE Report to the Nations 2024, 43% of fraud cases are uncovered through tips. However, GIR findings reveal that 76% of Indian respondents felt pressure not to report misconduct, and 51% witnessed retaliation against whistleblowers. To address this, there is a need for secure, accessible and well-communicated whistleblowing mechanisms, backed by leadership support and employee training.

Technology and innovation emerge as powerful enablers in the fight against fraud. From AI-powered background checks and document verification to real-time monitoring and predictive analytics, the knowledge paper outlines how digital tools can enhance fraud detection and response. It also highlights sector-specific risks—such as counterfeit products in FMCG, moonlighting in IT/ITeS, and fake policies in insurance—and calls for tailored fraud control strategies that align with industry-specific workflows and threats.

There is a dire need to harmonize global standards with local enforcement since fraud schemes increasingly span jurisdictions. A unified regulatory approach by building shared intelligence networks, adopting AI-driven compliance platforms and investing in multilingual training can lead to global strategies being effectively implemented at the local level.

Organizations need to rethink their approach to fraud risk management by embedding ethics, leveraging technology and fostering a culture of transparency. This can help them navigate the complexities of modern fraud and build a future-ready, integrity-driven enterprise.

Explore in-depth strategies, sector-specific insights and practical tools to strengthen your organization’s fraud resilience by downloading the full EY-FICCI knowledge paper here.