Reasons why white collar crimes are rising in India, and ways to tackle the menace

In view of the mounting cases of white-collar crimes in India, its impact on businesses and an increase in anti-fraud fighting professionals, a white paper on 'The changing dynamics of white-collar crime in India' was launched recently on the sidelines of EY's ‘Forensic Trailblazer Award’ event.

Meant to honour for excellence in forensic investigations, EY Fraud Investigation and Dispute Services and Association of Certified Fraud Examiners Western Region Chapter declared Divya Mohan from SAP (India) as the winner. He will go to ACFE’s Fraud Conference in Singapore and get one week of forensic technology training at EY.

At the event, Arpinder Singh, Partner and National Leader, Fraud Investigation & Dispute Services, EY soke on white collar crimes - “The cost and impact of white-collar crime has proved steep, and is increasing in magnitude, incidence and intricacy. Mitigating these risks will require sweeping changes at a macro as well as micro level, and also involve the expertise of anti-fraud or forensic specialists to deter current and future threats.”

Satish Mathur, Director General of Police, Maharashtra who felicitated the winner, said - “Increased public awareness, changing mind-set and technological disruption has created a challenging environment. As fraudsters attempt to break ethical and regulatory barriers; corporates, government and the society at large need to join forces with the mutual objective of curbing white-collar crime. This will spur economic growth, improve investor confidence and build a better future.”

The white paper launched, meanwhile, cited how both corporate India as well as the Government need to join forces, and come together to tackle the current and imminent problems around white-collar crime.

It said- "With the nature of such crimes becoming complex, piercing new sectors and becoming increasingly trans-border, there is a dire need to have more technologically advanced platforms to battle these risks. In addition, multi-jurisdiction fraud will demand closer collaboration not just between corporate and enforcement agencies within a country, but could transcend borders to assume a global nature."

It also noted - "Going forward, there will also be increased collaboration between global enforcement agencies, as well as corporates whose operations spans geographies, to detect and deter perpetrators of white-collar crime. Investigators probing into such cases will therefore have to develop skill-sets which can enable them to not only understand the psyche of the perpetrator, but also regulations in different jurisdictions."

Here are some of the ways, it noted, the menace can be tackled:

- Establishment of institutions specialized in imparting forensic skills
With increasing cases of white-collars crime, it is becoming critical to have “formal” training and skill-building exercises around forensic investigations. Setting up specialized courses in colleges at a graduate or a master’s level, designed to exclusively cater to the needs of the modern day forensic professionals, would be an ideal scenario. Setting up of an apex forensic investigation training institute, which could be involved in the training of personnel of various enforcement agencies, as well as research and identification of best practices in the field of forensic investigations is another way to tackle the perils of whitecollar crime.

- Driving transparency
Driving transparency is key to creating a sustainable ethical framework. Berlin-based corruption watch-dog Transparency International, in its latest CPI has ranked India 76 out of the 168 countries, compared to 85 in the previous index. This highlights a positive perception of transparency in the country, driven by factors such as new and improved regulations, greater enforcement activities, improved public awareness and the Government’s initiatives to promote the country as an investment hub.

- Setting up forensic technology centers of excellence
Of the various initiatives taken by the Government, the digital revolution, a part of the Digital India initiative, could be taken to the next level by setting up forensic technology centers of excellence.

- Public—private partnership
Forensic is increasingly emerging as a specialized skillset and domain of knowledge, and various private organizations are investing in creating a wider pool of forensic professionals in the country. The Government could explore the benefits here by possibly recruiting such professionals in a lateral manner to support its regulatory and enforcement framework. Allowing participation could help capitalize on the specialized skillsets acquired by investigators and also support in understanding key governance challenges faced.

-Augmenting awareness and incentivizing
Public service announcements are one of the oldest and most successful means to create awareness among the masses. It has gained popularity in the recent past due to the emergence of social networking sites, making it easier to share video content. This platform could be utilized as a vehicle of communication to spread awareness among the masses about sound governance, common laws governing corruption and accessibility to ombudsmen. An announcement of bounty for whistle-blowers on the lines of countries such as the US may also encourage more people to report irregularities.