Are fraud reporting hotlines worth it? Yes, according to the ACFE’s Report to the Nations, a biennial global study on occupational fraud. For more than a decade, the ACFE’s Report to the Nations has measured the effect of hotlines on generating tips about occupational fraud, and the data has consistently shown that frauds are more likely to be detected by tip when a hotline is in place. While 46% of cases in the report were detected by tip at organizations with a hotline, only 30% of cases were detected by tip in organizations without a hotline.Read More
Karin Henriksson, Founding Partner of WhistleB, Whistleblowing Centre
Whistleblowing and compliance expert
For many years, telephone hotlines have been considered the most popular form of reporting whistleblowing issues. However, WhistleB’s recent client experience in Scandinavia has indicated that reporting through online channels is equally effective.
Research conducted by the ACFE seems to corroborate this trend. For the first time, tips submitted via email (34.1%) and web-based or online form (23.5%) combined to make reporting more common through the internet than by telephone.
Against the backdrop of increasing regulation across Europe aimed at strengthening whistleblower protections, we were curious about the potential of online whistleblowing systems, based on the experience of Nordic organizations.
At the 3rd Summit on Anti-Corruption (Nordics Edition) in November 2016, we took the opportunity to ask compliance professionals directly about their preferences of whistleblowing reporting. Here is what we found:
- Nearly 80% of respondents receive the majority of their whistleblowing reports through a web service.
- More than three-quarters of compliance professionals surveyed said they preferred to receive reports through a web service, whereas only one in 10 preferred to receive them by phone.
- Nearly 70% said that they manage whistleblowing cases internally; approximately 30% handle them both internally and externally.
We also surveyed our own customers during the summer of 2016. The request went out to approximately 100 organizations who told us that approximately half of the reports they received led to an anonymous dialogue between the whistleblower and the employer.
What can we learn from these results?
- The anonymity and security of web-based reporting channels appeals to whistleblowers, for whom blowing the whistle remains an uncomfortable step to take. Additionally, web platforms that are increasingly optimized for smartphones enable whistleblowers to more easily record and report evidence of misconduct.
- We believe that one of the key reasons that compliance officers prefer online reporting systems is that an online system enables them to capture information more efficiently, and subsequently handle cases more effectively with the help of a structured online process.
- Nordic companies clearly prefer an internal investigation team, and the advantages thereof: the ability to extract and combine information from multiple reports and sources to find a pattern; more secure handling of information; and, cost-effective solution.
- Online reporting is invaluable in bringing about anonymous internal dialogue between the organization and the whistleblower.
Online whistleblowing has a firm position in the prevention of fraud. As one of our customers wrote in our summer survey, "We see that reporting increases when the employees can report with guaranteed anonymity and in their own language."
Karin Henriksson, Founding Partner of WhistleB, Whistleblowing Centre is a whistleblowing and compliance expert. Karin has previously worked in the European Union bodies, as well as at the Nordic Council of Ministers. She has for many years worked as a senior consultant in the area of ethics and compliance, helping customers set up whistleblowing centers as a part of their governance and compliance model. She is also a member of Transparency International’s whistleblowing group in Sweden.
Skype: WhistleB Karin Henriksson