Sophia Carlton is a Senior Manager in Accenture’s North America Fraud & Financial Crimes practice. She is an award-winning thought leader with 7+ years of consulting experience.
Scott Scholten leads Accenture’s North American power & utilities risk practice. He is a former Chief Risk Officer with over thirty years of industry and risk advisory experience.
Utilities pay a lot of attention to external threats, often overlooking major risks lurking from within. Internal fraud, however, is costing utilities hundreds of millions each year.
The impact of internal fraud goes beyond dollars, invariably leading to wide-spread reputational harm. Fraud is not a new problem for utilities, but it is a rapidly growing one.
Energy trading, energy efficiency programs, storm response, and contractor relationships are breeding grounds for fraud, and fraud persists and grows until discovered and snuffed out. Bolstering fraud defenses is no longer an option for utilities but a business imperative. The question is, do you have the tools, culture, and conviction to know where your company is exposed to internal rogue actors?
Exploring Threats from Within
We think about fraud as internal or external. The lion's share of utility fraud prevention focuses on external actors. In part, this is because the perceived targets of external threats are large-scale, mission-critical things like regional power grids.
However, it is the insiders who possess specific knowledge of utilities' internal workings and systems, which can make them even more threatening than outside actors. What's more, utility executives often suffer from an optimistic view that prevents them from seeing their own coworkers as potential bad actors.