Fraud Is Rising – But The Bigger Issue Is Whether Organisations Are Equipped To Respond
Our Client Insight series highlights the key risks and
structural shifts shaping today’s operating environment.
Drawing on our work with clients across sectors, we provide
practical, experience-led perspectives to help organisations
anticipate emerging threats and respond with confidence.
We Have Seen This Before – What Is Different Now Is The Pace And Scale
We are seeing a marked increase in client enquiries relating to suspected or actual fraud. While many of these cases
are emerging from the charity sector, the underlying drivers are not sector-specific – they reflect a broader shift in the
risk environment.
This is not the first time this pattern has emerged.
Periods of economic stress – most notably the aftermath of the 2008 financial crisis and the COVID-19 pandemic –
have consistently been associated with increases in both the incidence and complexity of fraud. Financial pressure,
operational disruption and weakened controls create the conditions in which fraud risk accelerates.
The current environment shares many of these characteristics.
What is different, however, is the scale and speed at which fraud can now occur – and the extent to which many organisations remain reliant on control frameworks designed for more stable conditions.
Why Fraud Risk Is Accelerating
Fraud is often understood through the “fraud triangle”: pressure, opportunity and rationalisation. In the current
environment, all three are intensifying simultaneously – mirroring patterns observed in previous periods of economic
disruption, but with greater complexity.
- Financial pressure is increasing
Economic strain is affecting employees, suppliers and beneficiaries alike. As seen in previous downturns, this
increases both the motivation to commit fraud and the ability to rationalise it. - Control environments are being stretched
Periods of financial constraint often lead to deferred investment in governance, systems and oversight. Combined with organisational change—whether growth, restructuring or crisis response—this creates gaps that can be exploited. - Fraud is becoming more scalable and sophisticated
Unlike previous cycles, fraud today is increasingly enabled by technology. Identity fraud now represents a significant
proportion of cases in the UK, with criminals able to operate at scale with relatively low barriers to entry.
This combination – familiar drivers, but amplified by technology – is what makes the current environment particularly challenging.
Why This Is Particularly Relevant For Charities
While these pressures apply across sectors, charities
face a distinct and often more acute combination of
risks.
Demand for services is increasing, while income –
particularly in real terms – remains constrained. Many
organisations continue to operate with lean structures
and high-trust cultures, often prioritising delivery over
infrastructure.
These characteristics are fundamental to how charities
operate – but they also create exposure.
The very features that enable charities to deliver
impact – trust, decentralisation and mission focus – can
increase vulnerability to fraud if not actively managed.
This creates a “double squeeze”: rising operational
pressure alongside heightened fraud risk.
A Shift In The Nature Of Fraud
It is not just the volume of fraud that is changing – it is
its profile.
- Compared to previous economic cycles, fraud is now:
- More distributed – featuring frequent, lower-value, high-volume activity alongside large individual cases
- More internal – with increased insider and opportunistic fraud
- Harder to recover – with reduced likelihood of asset recovery once fraud has occurred
- More technologically enabled – leveraging digital channels and emerging tools to scale rapidly
In effect, fraud has become more frequent, less visible
and more difficult to contain.
What This Means For Organisations
Many control frameworks in place today were designed in response to risks identified in previous cycles.
However, the operating environment has shifted materially.
Organisations should consider:
- When was your fraud risk assessment last refreshed – and does it reflect current conditions?
- Are your controls resilient under sustained financial and operational pressure?
- Do you have visibility of emerging risks, or are issues only identified retrospectively?
- How effective are your detection and response mechanisms in practice?
These are no longer periodic governance considerations – they are immediate operational priorities.
Moving Forward: From Static Controls To Dynamic Risk Management
Responding effectively requires more than incremental change. It requires a shift in mindset.
Rather than relying on periodic assurance, organisations should move towards continuous and targeted fraud risk
management. This includes:
- Prioritising fraud risk assessments in high-pressure and high-change areas
- Stress – testing controls against realistic and evolving fraud scenarios
- Expanding the use of data analytics and continuous monitoring
- Strengthening speak-up and whistleblowing mechanisms
- Actively embedding an anti-fraud culture across the organisation
The objective is not only to prevent fraud, but to identify, contain and respond to it more effectively when it occurs.
Final Thought
Economic pressure does not create fraud in isolation – but it consistently exposes underlying weaknesses.
We have seen this pattern before. What is different now is how quickly those weaknesses can be exploited.
The organisations most at risk are not necessarily those under the greatest strain, but those still relying on control
frameworks designed for a different environment.
Recognising this shift, and adapting accordingly, will be critical in navigating the current landscape.
If you’d like to explore what this means in practice please feel free to contact Thanzil Khan, Partner – Risk and Technology Assurance, at thanzil.khan@acumon.com.