Forensic outlook - 2016

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India has witnessed a number of transformational efforts to boost economic growth and improve investor confidence. However, corporate India is vulnerable to the looming threat of risks around noncompliance, fraud and corruption.

Here is our list of key trends that corporates in India should be cognizant of in 2016 to mitigate risks and chart a holistic growth road map.

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Confronting cyber threats

Cybercrime is the fastest-growing fraud risk in India, according to our 2016 Global Forensic Data Analytics Survey, Shifting into high gear: mitigating risks and demonstrating returns. In the survey, 40% of respondents from India highlighted an increasing level of concern around cyber breaches or insider threats over the last two years; another 65% stated that these risks are leading to increased investment in forensic data analytics (FDA). This shows companies’ intent to having a more proactive approach and making higher investment in cybersecurity.

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Bribery and corruption to remain challenging

According to Transparency International’s Corruption Perception Index 2015, India ranked 76, up from 85 in 2014. While the rankings show progress, the score is the same as last year, at 38/100. This means that while India’s ranking has relatively improved with respect to other countries, the perceived level of corruption has not changed. With regulatory action and enforcement underway, the crackdown on corrupt practices is expected to be dealt with strictly. Keeping this in mind, corporations will have to build and maintain internal mechanisms to manage these threats and simultaneously evade any punitive action.

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Concerns in the banking and financial services sector

The RBI is deep diving into resolving the challenges faced by the banking and financial services sector. The recent resolutions around stressed assets such as strategic debt restructuring, establishing the central fraud registry and early warning signals are expected to aid in cleaning up balance sheets and improving the efficacy of the sector. With these reforms and guidance in place, the sector will likely stabilize and be on the path to recovery.

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4. Liberating General Counsels through eDiscovery and managed document review

General Counsels (GCs) are looking to rationalize the average cost for legal services. Recent reports peg the global market for eDiscovery services at as much as US$8.2 billion at the end of 2015. This shows that markets are maturing and companies are using specialized services such as eDiscovery to manage the review process. The adoption of technology as an enabler continues, as expectations become aggressive and the quantum of work accelerates rapidly.

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5. Commercial disputes to be on the rise

The need for speed in resolving legal matters is paramount, and alternate dispute resolution mechanisms can offer companies a much-needed breather. With the Parliament passing the Arbitration and Conciliation Act, 2015 and Enactment of Commercial Courts in December 2015, the process of dispute resolution is expected to become transparent and effective.

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